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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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FORM 10-K/A

(Amendment No. 2)



|x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE  SECURITIES EXCHANGE ACT OF 1934
|- | -------------------------------------------------------------------------------------



| | For the fiscal year ended December 27, 2002
| | -------------------------------------------



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE  SECURITIES EXCHANGE ACT OF 1934
|- | -----------------------------------------------------------------------------------------



Commission file number: 333-19495



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RADNOR HOLDINGS CORPORATION

(Exact name of Registrant as specified in its
charter)



|Delaware                                                                          |  | 23-2674715                            
|--------------------------------------------------------------------------------- |  | --------------------------------------
|(State or other jurisdiction ofincorporation or organization)                     |  | (I.R.S. EmployerIdentification Number)
|                                                                                  |  |                                       
|Three Radnor Corporate Center, Suite 300100 Matsonford Road, Radnor, Pennsylvania |  | 19087                                 
|(address of principal executive offices)                                          |  | (Zip Code)                            



Registrants
telephone number, including area code: 610-341-9600



Securities registered pursuant to Section 12(b) of the act: None



Securities registered pursuant to Section 12(g) of the act: None



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Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.  Yes  x  No ̈



Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Securities Exchange Act of 1934).  Yes ̈No  x



Indicate by check mark if
disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrants knowledge, in definitive proxy or information statements incorporated by reference in Part
III of this Form 10-K or any amendment to this Form 10-K. x



As of March 11, 2003 there were 600 shares of the Registrants Voting Common Stock ($.10 par value), 245 shares of the Registrants Nonvoting Common Stock ($.10 par value) and 5,400 shares of the
Registrants Class B Nonvoting Common Stock ($.01 par value) outstanding. The aggregate market value of voting stock held by non-affiliates of the Registrant as of such date was $0.



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EXPLANATORY NOTE:



On October 1, 2003, the Company filed Amendment No. 3 to its Registration Statement on Form S-4 with the Securities and
Exchange Commission (the SEC), amending its Registration Statement on Form S-4 originally filed with the SEC on May 9, 2003. The Company hereby amends and restates its Annual Report on Form 10-K for the year ended December 27, 2002 that
was originally filed with the SEC on March 12, 2003 (the Original Filing) and previously amended by the filing with the SEC on April 22, 2003 of Amendment No. 1 to the Original Filing to provide supplemental information and clarifying
disclosure requested by the SEC in connection with the Form S-4.



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RADNOR HOLDINGS CORPORATION

2002 FORM 10-K

TABLE OF CONTENTS



|Item |  |                                                                                       |  | Page
|---- |  | ------------------------------------------------------------------------------------- |  | ----
|     |  |                                                                                      
|     |  | PART I                                                                                |  |     
|     |  |                                                                                      
|1.   |  | Business                                                                              |  |     
|     |  | Industry Overview                                                                     |  | 1   
|     |  | Products                                                                              |  | 1   
|     |  | Sales, Marketing and Customers                                                        |  | 2   
|     |  | Manufacturing                                                                         |  | 3   
|     |  | Raw Materials                                                                         |  | 5   
|     |  | Risks Attendant to Foreign Operations                                                 |  | 5   
|     |  | Proprietary Technology and Trademarks                                                 |  | 6   
|     |  | Competition                                                                           |  | 6   
|     |  | Employees                                                                             |  | 6   
|     |  | Environmental Matters                                                                 |  | 7   
|     |  |                                                                                      
|2.   |  | Properties                                                                            |  |     
|     |  | Packaging                                                                             |  | 8   
|     |  | Specialty Chemicals                                                                   |  | 8   
|     |  |                                                                                      
|3.   |  | Legal Proceedings                                                                     |  | 9   
|     |  |                                                                                      
|4.   |  | Submission of Matters to a Vote of Security Holders                                   |  | 9   
|     |  |                                                                                      
|     |  | PART II                                                                               |  |     
|     |  |                                                                                      
|5.   |  | Market for Registrants Common Equity and Related Stock Matters                       |  | 10  
|     |  |                                                                                      
|6.   |  | Selected Financial Data                                                               |  | 11  
|     |  |                                                                                      
|7.   |  | Managements Discussion and Analysis of Financial Condition and Results of Operations |  | 12  
|     |  |                                                                                      
|7A.  |  | Quantitative and Qualitative Disclosures About Market Risk                            |  | 20  
|     |  |                                                                                      
|8.   |  | Financial Statements and Supplementary Data                                           |  | 20  
|     |  |                                                                                      
|9.   |  | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure  |  | 21  
|     |  |                                                                                      
|     |  | PART III                                                                              |  |     
|     |  |                                                                                      
|10.  |  | Directors and Executive Officers of the Registrant                                    |  | 22  
|     |  |                                                                                      
|11.  |  | Executive Compensation                                                                |  | 24  
|     |  |                                                                                      
|12.  |  | Security Ownership of Certain Beneficial Owners and Management                        |  | 26  
|     |  |                                                                                      
|13.  |  | Certain Relationships and Related Transactions                                        |  | 28  
|     |  |                                                                                      
|14.  |  | Controls and Procedures                                                               |  | 28  
|     |  |                                                                                      
|     |  | PART IV                                                                               |  |     
|     |  |                                                                                      
|15.  |  | Exhibits, Financial Statement Schedules and Reports on Form 8-K                       |  | 29  



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PART I



|ITEM 1. |  | BUSINESS
|------- |  | --------



Radnor Holdings Corporation (the Company, Radnor, we, us or our) is a leading manufacturer and
distributor of foam packaging products in the U.S. and specialty chemical products worldwide. We have been manufacturing EPS and related products sold to the foodservice, insulation and protective packaging industries for more than 25 years. In the
foodservice industry, we are the second largest manufacturer of foam cup and container products in the U.S. By capacity, we are also the fifth largest worldwide producer of EPS. In fiscal 2002, we produced more than 13 billion foam cups for hot and
cold drinks, foam bowls and containers and thermoformed lids and 360 million pounds of EPS. We supply 100% of our own EPS needs in addition to supplying EPS to other manufacturers of foodservice, insulation and protective packaging products.



Financial information concerning the Companys business
segments appears in Note 11 to the Consolidated Financial Statements included under Item 8 herein.



Industry Overview



Packaging.We compete within the foodservice industry, which includes products manufactured with paper, plastic, foam and other materials. The foam segment of the disposable cup and container market, in which we primarily operate, is highly concentrated.
We believe Radnor and its primary competitor account for more than 80% of the market. A recent independent industry analysis of the U.S. foam cup and container market through 2010 projects an annual growth rate of approximately 3%. The market for
other plastic and paper cups and containers is significantly more fragmented.



The factors that originally gave rise to the use of disposable products continue to support the markets growth. These include lower labor, maintenance and energy costs as compared to reusable products, as well
as sanitary considerations and growth in the consumption of take-out foods and beverages. The expansion of fast-food restaurant chains and warehouse retailers and the consolidation of some foodservice distributors into larger companies with a
national presence have also increased the use of disposable products.



Within the disposable product market, foam cup and container usage has increased significantly over the last two decades as a result of factors unique to this segment. These factors include the superior insulating qualities of foam, lower
production costs and the flexibility in sizing and molding of foam products. In addition, demand for larger sizes and specialized products contributes to growth of the foam packaging segment. Although the success of foam cups to date has been
primarily in the hot drink segment, we believe that there continue to be significant growth opportunities in the sale of cold drink cups, particularly in the large (16 through 64 ounce) sizes, including specialized products such as car carrier cups,
on which we make higher margin.



Specialty Chemicals.We
compete in the North American and European EPS markets. In North America, we sell EPS to the insulation, protective packaging and foodservice industries. A recent independent industry analysis estimated the U.S. EPS market to have been in excess of
400,000 metric tons in 2000 and projected an annual growth rate of approximately 3% through 2010. This market is concentrated, with Radnor and three other competitors accounting for over 90% of the North American market.



In Europe, we sell EPS to the insulation and protective packaging industries.
The EPS market in Europe includes a broader range of product applications and is more fragmented than the North American market. A recent independent industry analysis estimated the European EPS market to have been in excess of 995,000 metric tons
in 2000 and projected an annual growth rate of approximately 3% through 2005.



Products



Packaging.Radnor
manufactures a broad range of foam packaging products, including cups, bowls and containers, and thermoformed plastic lids. The use of foam provides an insulating feature to our products, allowing



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them to be used for both hot and cold beverages and food products while enhancing comfort for the end user. Foam cups are manufactured in varying sizes (4 to
64 ounces) for both hot and cold beverages and are sold under numerous brand names, including the WinCup, COMpac, Profit Pals, STYROcup, Big Cool and Simplicity brand names. Foam bowls and other containers are made in varying sizes (3.5 to 32
ounces) for both hot and cold food products and are sold under the STYROcontainers brand name. Our thermoformed leak-resistant plastic lids feature a stacking ring that minimizes the shifting of a second cup when placed on top of the
first cup. Other enhanced lid features include vents, tear-away tabs and straw slots, depending on the intended use. Cups, bowls, containers and lids are designed so that the same lid can be interchanged with many different cup, bowl or container
sizes, which simplifies inventory and display area requirements. For example, our 10 cup-2 lid product line allows two different lids to fit with ten different size cups.



Our cups, bowls and containers are available with custom offset or embossed printing. We also manufacture a broad range of
custom-designed foam containers for many of our large national accounts. A significant component of this business is the manufacturing of containers for customers, which use the containers for dried noodle products sold through retail grocery and
supermarket chains. We also supply our products in private label packaging for certain of our customers.



We work continuously with our customers to develop new products. One of our early customer-driven developments was the flare cup design which
replaced the heavier rim typically built into the top of a foam cup with a smooth, flared edge that improves the stability of the cups construction. The flare cup was well-received by customers because it combined the favorable appearance of
paper with the insulating qualities of foam. More recently, our car carrier cups have addressed the end users desire for a cup that can contain larger volumes of liquid while fitting into an automobiles cup carrier slots.



Specialty Chemicals.In North America, we manufacture EPS for our
internal consumption, in addition to selling directly to third-party manufacturers of foodservice, insulation and protective packaging products. EPS is categorized by size, with the smallest size, or cup-grade, used to manufacture foam cups and
containers. Larger sizes are sold to manufacturers of insulation and protective packaging products and include EPS modified for fire retardancy and non-modified EPS.



We manufacture a broad range of EPS formulations in Europe for conversion into a variety of standard and specialized
insulation and packaging products. This EPS is made primarily for the insulation and protective packaging industries and includes a range of bead sizes and densities for conversion by customers into light and heavy insulation boards as well as
various shape products, such as insulated fish packaging boxes. We work closely with our European customers to incorporate special product features into our EPS, such as fire retardancy, specialty coatings, higher thermal insulation qualities and
antistatic properties.



Sales, Marketing and Customers



Packaging.Radnor sells its disposable foam packaging products in the foodservice industry through a 28-person sales organization and through an extensive network of 55 independent sales representatives. Sales and marketing efforts
are directed by our Senior Vice President of Sales and Marketing and are supported by 12 senior sales managers averaging more than ten years experience in the foodservice industry. We believe our experienced sales team and long-term
representative relationships enhance our ability to provide high levels of customer service and specialized marketing programs, including custom-designed foam products. Major end users of these products include fast-food restaurants, full-service
restaurants, hospitals, nursing homes, educational institutions, airlines, business offices, movie theaters and other leisure time concessionaires, such as sports stadiums.



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We sell disposable foam packaging products in the foodservice industry to more than 1,400 national,
institutional and retail accounts throughout the United States, in Mexico and in other countries. This customer base, which includes many of the foodservice industrys largest companies, can be divided into three major categories:



National Accounts. National accounts are customers
that utilize foam products in the sale of their own products and consist primarily of large fast-food restaurant chains and convenience stores. During fiscal 2002, sales to these customers accounted for approximately 11.8% of our net sales.



Institutional Accounts. Institutional
accounts are customers that purchase foam products with a view toward reselling such products in bulk to institutional end users, such as hospitals, nursing homes, educational institutions, airlines, movie theaters and similar leisure time
concessionaires, such as sports stadiums. These customers, representing approximately 44.5% of our net sales in fiscal 2002, are primarily large foodservice distributors.



Retail Accounts. Retail accounts are customers that purchase foam products for resale to actual
consumers of the products and consist primarily of supermarket chains and discount stores. In fiscal 2002, retail customers accounted for approximately 9.3% of our net sales.



Approximately 10.0% of our foam product sales are made pursuant to contracts under which product prices are automatically
adjusted based on changes in prices of EPS and other raw materials. Substantially all of our other foam product sales are made pursuant to contracts or other arrangements under which we have the right to change product prices on 30 to 60 days
prior written notice.



Specialty Chemicals.In North
America, we sell EPS through a dedicated sales force averaging 19 years experience and two broker organizations to manufacturers of foam protective packaging and insulation products. In Europe, we market through our Europe-wide sales office network.
In support of these sales and marketing efforts, we employ people who are knowledgeable about chemical engineering and manufacturing processes in order to provide technical assistance to our customers.



In Europe, we sell EPS to 200 primarily mid-sized companies throughout
Europe. We have actively pursued these customers because they provide potential for higher margins and because of their increased reliance on our technical support, which results in a greater ability to foster long-term customer relationships. We
sell approximately 25% of our European EPS production to our former European insulation business pursuant to a long-term supply agreement.



No customer represented more than 7.2% of our net sales for fiscal 2002, although the five largest accounts represented approximately 28.1% of such sales.



Manufacturing



Our highly
automated manufacturing facilities produced more than 13 billion foam cups, bowls and containers and thermoformed lids and 360 million pounds of EPS in fiscal 2002. Our foam products for the foodservice industry are made with custom-designed foam
cup molding machines, lid production machines and foam cup and container printing machines. Our ten U.S. foam plants and our Polish foam plant generally operate 24 hours a day, seven days a week and 355 days a year. We also operate six plants
located in the United States, Canada and Europe that manufacture EPS from styrene monomer. These plants generally operate 24 hours a day, seven days a week.



Manufacturing Process.The manufacture of EPS, the primary raw material in the manufacture of foam products, has two steps: polymerization and
impregnation. In the polymerization phase, styrene monomer, which is a commodity petrochemical derived primarily from benzene and ethylene, is suspended in water and then treated with chemicals and catalysts to produce polystyrene crystal in various
sizes, each of which has different end-use applications, including general purpose polystyrene. To produce EPS, the crystal is impregnated with a high-purity pentane gas.



We manufacture our foam cups and containers utilizing a custom molding process. First, the cup-grade EPS is blended with a
lubricating agent and then pre-expanded so that the EPS is of the appropriate density. This pre-expanded EPS is then fed through special screeners to remove undersized and oversized beads. The pre-expanded EPS is then injected into machine molds and
fused by injecting steam into the mold cavity. After the EPS is fused, the mold shells are cooled, the mold halves are opened and the finished cups are ejected. The finished products are vacuum tested, counted and packaged.



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Our lid products are produced from high-impact polystyrene, or HIPS, which is subjected to heat and
pressure, after which the product is extruded through a thin die. The lids are then trimmed for finished goods packing, while the scrap is ground and reintroduced into the original material blend.



Quality Control.Our manufacturing quality control program for foam
foodservice products involves automated testing of all products for leaks. In addition, random testing is performed at least hourly at each facility for four or five attributes: seepage, weight, appearance, strength and, where applicable, print. We
centrally collect the resulting data, subject it to statistical analysis and review the results. In addition, each machine operator and packer performs various quality checks during the production process. We also obtain random samples of finished
foam packaging products from our various manufacturing facilities and perform an analysis similar to that described above at our Phoenix laboratory.



In addition to our own programs, certain of our larger customers have established their own product standards and perform periodic manufacturing audits at
our facilities, either through their own personnel or through an independent testing group such as ASI Food Safety Consultants. We also submit products to third-party laboratories for microbiologic and physical tests to assure that we conform to or
exceed industry product safety standards.



We utilize our
quality, service, manufacturing and customer partners to enact and follow through on initiatives consistent with total quality management and good manufacturing practices. Through these programs, we work with our customers to ensure product quality
and to create new products that reflect the present and future needs of our customers.



Our North American EPS quality control laboratory includes infrared spectrograph and atomic absorption units. Our laboratory chemists are capable of performing complex chemical and atomic analysis of styrene monomer,
polystyrene crystal, expandable polystyrene and all other material components of EPS production. This gives us the ability to customize EPS formulas to meet any special customer requirements. The EPS quality control program includes testing every
production batch of EPS to ensure it meets specific customer requirements. Each batch is tested for particle sizes, pentane gas volume and, if the EPS is to be used for insulation, their fire retardation capability.



In Europe, our sophisticated quality control laboratory is complemented by a
fully equipped analytical laboratory containing three fully instrumented, automatically controlled pilot reactors, a fully equipped reactor bay, including a reactor and equipment for screening and coating, as well as two complete lines for
converting EPS into insulation boards and shape-molded products. Testing equipment for analytical and quality audit work includes electronic balancers, equipment for testing burning behavior, gas chromatographs, sweep electron microscopes,
colorimeters, flexural/compressive strength testers, an izod impact tester and lambda value testers. We regularly test our EPS for a range of key attributes that vary by specific product. Our European facilities are either ISO 9001 or ISO 9002
certified and both are also ISO 14001 certified.



Engineering.We employ 72 full-time technical personnel, including 28 full-time engineers and engineering managers, based in the Phoenix, Corte Madera, Fort Worth and Canadian facilities. The engineering staff uses computer-aided
design and computer-aided manufacturing systems to design advanced, three-dimensional models of products and molds. Once an electronic image of the machine and mold part design is generated, the part can be custom manufactured. We have the capacity
to construct all of the proprietary equipment, machines and molds used in the production, testing and packaging of our foam products. We have also developed and are installing in our manufacturing facilities automated materials handling equipment
that includes in-line printing, automatic case packaging equipment and more advanced molding machines.



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We continually examine how to improve our manufacturing process efficiencies. Sophisticated infra-red
imaging systems, providing real-time video displays, are used to evaluate the thermal efficiency of molds and machines under development. We also can create special prototype mold forms for new lid designs and single-cavity cup and container molds,
both of which enhance our ability to evaluate customer design requests rapidly.



The managing director of our European EPS operations is an engineer, as are each of the managers and supervisors of the production facilities located in Europe. In Europe, we also employ two full-time engineers who
are responsible for process and production engineering and interact regularly with research and development personnel based in the analytical laboratory as well as senior technical support staff responsible for assisting the sales team.



Raw Materials



Radnors foam
products are manufactured from EPS, which is produced from styrene monomer. Styrene monomer is a commodity petrochemical that is readily available throughout the world in bulk quantities from numerous large, vertically integrated chemical companies.
Styrene monomer prices have fluctuated significantly as a result of changes in petrochemical prices and the capacity, supply and demand for styrene monomer. For example, the contract price for styrene monomer ranged from $.35 to $.43 per pound
during 2000 and decreased to $.25 per pound in 2001 before increasing to $.45 per pound in April 2003. Through August 2003, the contract price for styrene monomer has decreased to $0.38 per pound. Although future styrene monomer prices cannot be
predicted with accuracy, prices are forecasted by independent industry surveys and producer reports to decline over the next year. While the Company has been able to pass on the majority of past price increases to customers, there can be no
assurance that the Company will be able to increase prices if styrene monomer costs rise in the future.



The Company has historically purchased a majority of its styrene monomer requirements under a variety of long-term supply contracts. These contracts
provide a supply of styrene under several different pricing mechanisms and with volume discounts. The various pricing mechanisms include those tied to raw material prices, spot market indices, contract indices and varying mixtures of the three.
Under these contracts, which expire through 2006, the Company acquires a minimum of approximately 75% of its current styrene monomer needs.



High-purity pentane, which is used as the expanding agent in the production of EPS, is available from a limited number of suppliers. Should high-purity
pentane become unavailable, however, high-purity butane may be substituted as the expanding agent.



The raw materials we use for the manufacture of thermoformed lids are primarily plastic resins such as HIPS, which are available from a number of sources.
Our HIPS resin supplies are purchased under various agreements that contain minimum and maximum purchase requirements. The price we pay for HIPS resin is determined at the time of purchase.



Risks Attendant to Foreign Operations



The Company conducts its businesses in numerous foreign countries and, as a result, is subject to risks customarily encountered in foreign operations, including fluctuations in foreign currency exchange rates and controls, import and export
controls, and other economic, political and regulatory policies of local governments. The Companys foreign entities report their assets, liabilities and results of operations in the currency in which the entity primarily conducts its
businesses. The foreign currencies are ultimately translated into U.S. dollars for financial reporting purposes.



Note 11 to the Companys financial statements included under Item 8 herein contains information with respect to the geographic composition of the
Companys operations and financial position as of and for the years ended December 27, 2002, December 28, 2001 and December 29, 2000.



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Proprietary Technology and Trademarks



We have developed a broad array of proprietary technology that is utilized in various stages of our manufacturing operations. We rely primarily upon confidentiality agreements and restricted plant access to protect our proprietary
technology. We own several patents relating to our cup design and our EPS manufacturing processes. However, we do not consider these patents material to our operations.



We hold 23 trademarks registered in the United States, several of which are also registered in other countries. We also hold
a number of unregistered trademarks. We do not consider any of these trademarks material to our operations.



Competition



We compete in the
highly competitive foodservice industry. The foam segment of the disposable cup and container market is highly concentrated and, within this segment, we compete principally with Dart Container Corp., which has significantly greater financial
resources than we have and controls the largest share of this market segment. We do not believe that companies operating in related markets are likely to enter the foam segment due to the significant investment that would be required.



We believe that competition within the foam segment of the market is based
primarily on customer service, product quality and the price at which products are offered. We believe that our market position is attributable to our high level of customer service and product quality, strategically located manufacturing
facilities, proprietary technology and experienced management team.



We also compete with the paper segment, which is significantly more fragmented than the foam segment. We believe that competition between foam and paper is based on product appearance, quality and price.



In North America, the EPS industry is highly concentrated. Management
believes that each of NOVA Chemicals, Inc., Huntsman Chemical Corp. and BASF Corporation, which are larger than we are and have greater financial resources than we have, controls a significant share of the market for supplying EPS to manufacturers
of insulation and protective packaging products. We believe that competition within this industry is primarily based on price, although customer service, support and specialized product development can be significant competitive factors,
particularly among the smaller manufacturers of foam insulation and protective packaging products.



The European EPS industry is more fragmented than in North America. Several companies, including BASF Corporation, NOVA Chemicals, Inc. and B.P. Amoco PLC
are larger and have more substantial financial resources than we have. We believe that competition is based primarily on price, although technical support, specialized product development and consistently high quality beads are important factors to
many of our customers.



Employees



As of December 27,
2002, we had 1,692 full-time employees. We have never experienced a material labor strike or other labor-related work stoppage. We consider our relations with our employees to be good.



Our U.S. employees are not represented by any union. In Canada, approximately 65% of our employees are represented by a
union and are covered by a collective bargaining agreement. In Finland, over 80% of our employees are represented by one of three unions and we are subject to two collective bargaining agreements. The European Union directives regarding employment
are applicable to us in Finland; however, the terms of the collective bargaining agreements will control employment relationships to the extent that these agreements address relevant issues in a more detailed manner and include benefits exceeding
the minimum standards established by the directives.



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We are dependent on the management experience and continued services of our executive officers, including
our Chief Executive Officer, Michael T. Kennedy. The loss of the services of these officers could have a material adverse effect on our business. In addition, our continued growth depends on our ability to attract and retain experienced key
employees.



Environmental Matters



Our
facilities are used for manufacturing or warehousing of foam container products or the EPS from which such products are manufactured. Many of these facilities are subject to federal, state, foreign and local laws and regulations relating to, among
other things, emissions to air such as pentane, styrene and particulate matter, discharges to water, and the generation, handling, storage, transportation and disposal of hazardous and non-hazardous materials and wastes.



In 1996, the soil and shallow groundwater at our domestic EPS facilities were
found to contain elevated levels of various contaminants. However, based on the results of soil and groundwater testing, material remediation efforts with respect to these conditions have not been, and we believe will not be, required. We own and
operate, or owned or operated, underground storage tanks, also referred to as USTs, at several of our facilities for the storage of liquid pentane and heavy fuel oil. Leak detection or containment systems are in place at each facility with USTs that
we currently own or operate. USTs are generally subject to federal, state, local and foreign laws and regulations that require testing and upgrading of USTs and remediation of polluted soils and groundwater resulting from leaking USTs. In addition,
if any leakage from our USTs were to migrate onto the property of others, we could be subject to civil liability to third parties for remediation costs or other damages.



Some of our facilities have been alleged or are known to have failed to comply with various reporting or permitting
obligations under applicable environmental laws and regulations. The resolution of these allegations and failures has not had a material adverse effect on our financial condition or results of operations, nor do we believe that any future costs of
achieving and maintaining compliance with these laws and regulations will have that effect. It is possible that we could incur significant fines, penalties or capital costs associated with any confirmed noncompliance with these laws and regulations.
Moreover, there can be no assurance that recently promulgated or future environmental laws or regulations, including regulations affecting the volume of and permitting for air emissions both in the United States and in Europe, will not require us to
incur substantial expenditures or significantly modify our operations.



Certain of our current and former facilities are located in industrial areas and have been in operation for many years. As a consequence, it is possible that historical or neighboring activities have affected properties currently or
formerly owned or operated by us and that, as a result, additional environmental issues may arise in the future, the precise nature of which we cannot now predict.



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|ITEM 2. |  | PROPERTIES
|------- |  | ----------



We lease approximately 8,000 square feet in Radnor, Pennsylvania, a suburb of Philadelphia, for our executive offices. We believe that our present
facilities are adequate for our current operations and that we will be able to lease or otherwise acquire any additional facilities as may be required for our future operations.



We also own or lease manufacturing, warehouse, office, machine assembly and utilities facilities at the locations shown in
the following table:



Packaging



|Location                 |  | Use                                                            |  | ApproximateFloor SpaceSq. Ft.
|------------------------ |  | -------------------------------------------------------------- |  | -----------------------------
|                         |  |                                                               
|Corte Madera, California |  | Manufacturing, warehouse, machine assembly and office (leased) |  | 88,000                       
|                         |  |                                                               
|Richmond, California     |  | Warehouse (leased)                                             |  | 103,000                      
|                         |  |                                                               
|Higginsville, Missouri   |  | Manufacturing and warehouse                                    |  | 68,000                       
|                         |  |                                                               
|Warrensburg, Missouri    |  | Warehouse (leased)                                             |  | 10,000                       
|                         |  |                                                               
|Jacksonville, Florida    |  | Manufacturing and warehouse (leased)                           |  | 128,000                      
|                         |  |                                                               
|Edison, New Jersey       |  | Warehouse (leased)                                             |  | 95,000                       
|                         |  |                                                               
|Metuchen, New Jersey     |  | Manufacturing                                                  |  | 84,000                       
|                         |  |                                                               
|Mount Sterling, Ohio     |  | Manufacturing and warehouse                                    |  | 56,000                       
|                         |  |                                                               
|Shreveport, Louisiana    |  | Manufacturing and warehouse                                    |  | 73,000                       
|                         |  |                                                               
|Stone Mountain, Georgia  |  | Manufacturing and warehouse (partially leased)                 |  | 377,000                      
|                         |  |                                                               
|Phoenix, Arizona         |  | Machine assembly (leased)                                      |  | 12,000                       
|                         |  |                                                               
|Tolleson, Arizona        |  | Manufacturing, warehouse and office                            |  | 170,000                      
|                         |  |                                                               
|West Chicago, Illinois   |  | Manufacturing, warehouse and office (partially leased)         |  | 350,000                      
|                         |  |                                                               
|El Campo, Texas          |  | Manufacturing and warehouse                                    |  | 91,000                       
|                         |  |                                                               
|Lodz, Poland             |  | Manufacturing and warehouse (leased)                           |  | 31,000                       



Specialty Chemicals



|Location            |  | Use                                                                               |  | ApproximateFloor SpaceSq. Ft.
|------------------- |  | --------------------------------------------------------------------------------- |  | -----------------------------
|                    |  |                                                                                  
|Fort Worth, Texas   |  | Manufacturing, warehouse and office (partially leased)                            |  | 208,000                      
|                    |  |                                                                                  
|Saginaw, Texas      |  | Manufacturing, warehouse and office                                               |  | 60,000                       
|                    |  |                                                                                  
|Baie DUrfe, Quebec |  | Manufacturing, warehouse and office                                               |  | 74,000                       
|                    |  |                                                                                  
|Porvoo, Finland     |  | Manufacturing, warehouse, machine assembly, utility and office (partially leased) |  | 112,000                      
|                    |  |                                                                                  
|Kokemaki, Finland   |  | Manufacturing, warehouse, utility and office (leased)                             |  | 52,000                       



8



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##### Table of Contents

|ITEM 3. |  | LEGAL PROCEEDINGS
|------- |  | -----------------



We are involved in a number of legal proceedings arising in the ordinary course of business. After taking into consideration legal counsels
evaluation of such actions, management believes that these actions will not have a material adverse effect on our financial condition or results of operations.



|ITEM 4. |  | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
|------- |  | ---------------------------------------------------



There are no matters to be reported hereunder.



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##### Table of Contents

PART II



|ITEM 5. |  | MARKET FOR REGISTRANTS COMMON EQUITY AND RELATED STOCK MATTERS
|------- |  | ---------------------------------------------------------------



Market Information



There currently exists no established public trading market for the Companys Voting Common Stock, $.10 par value, Nonvoting Common Stock, $.10 par
value, or Class B Nonvoting Common Stock, $.01 par value.



Holders



As of March 11, 2003, there were 3 holders of record of
the Companys Voting Common Stock, 11 holders of record of the Companys Nonvoting Common Stock and 7 holders of record of the Companys Class B Nonvoting Common Stock.



Dividends



No dividends were declared or paid during the years ended December 27, 2002 or December 28, 2001. The declaration and payment of dividends are subject to
the discretion of the Companys Board of Directors and will depend on various factors, including restrictions on dividends contained in the Companys credit agreements and the indentures pursuant to which the Company issued its 10% Senior
Notes due 2003 on December 5, 1996 (the Series A Notes) and its 10% Series B Senior Notes due 2003 on October 15, 1997 (the Series B Notes) and its 11% Senior Notes due 2010 on March 11, 2003.



10



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##### Table of Contents

|ITEM 6. |  | SELECTED FINANCIAL DATA
|------- |  | -----------------------



The following table presents summary consolidated financial data for the Company. The following data should be read in conjunction with the consolidated
financial statements, the related notes thereto and Managements Discussion and Analysis of Financial Condition and Results of Operations included elsewhere herein.



|                                                              |  | Year Ended                                 |        
|------------------------------------------------------------- |  | ------------------------------------------ | -------
|                                                              |  | Dec. 25,1998                               |        
|                                                              |  | ($ in thousands, except per share amounts) |        
|Results of Operations (1):                                    |  |                                            |        
|Net sales                                                     |  | $                                          | 303,586
|Cost of goods sold                                            |  |                                            | 220,691
|                                                              |  |                                            |        
|Gross profit                                                  |  |                                            | 82,895 
|Distribution expense                                          |  |                                            | 23,004 
|Selling, general and administrative expenses                  |  |                                            | 31,414 
|Gain on sale of business (2)                                  |  |                                            |       
|                                                              |  |                                            |        
|Income from operations                                        |  |                                            | 28,477 
|Interest, net (3)                                             |  |                                            | 18,776 
|Income from unconsolidated affiliates                         |  |                                            |       
|Other expense, net                                            |  |                                            | 965    
|                                                              |  |                                            |        
|Income (loss) before income taxes and discontinued operations |  |                                            | 8,736  
|Income tax expense (benefit)                                  |  |                                            | 3,340  
|                                                              |  |                                            |        
|Income (loss) from continuing operations                      |  | $                                          | 5,396  
|                                                              |  |                                            |        
|Balance Sheet Data (at end of period)(1):                     |  |                                            |        
|Working capital                                               |  | $                                          | 23,909 
|Total assets                                                  |  |                                            | 278,796
|Total debt, including current portion (4)                     |  |                                            | 195,998
|Stockholders equity (deficit)                                |  |                                            | 20,949 
|Cash dividends per share                                      |  |                                            | 240    

---

|(1) | The Companys fiscal year is the 52- or 53-week period that ends on the last Friday of December of each year. The years presented in the above table were 52-week years with the
exception of 1999, which was a 53-week year.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Represents gain resulting from sale of European insulation operations. See Note 1 to the Companys audited consolidated financial statements included elsewhere herein.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Interest includes amortization of premium and debt issuance costs related to the Companys senior notes of $1.0 million for the year ended December 25, 1998, $1.2 million for
the years ended December 31, 1999 and December 29, 2000, $1.1 million for the years ended December 28, 2001 and December 27, 2002.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | Total debt includes capital lease obligations.
|--- | ----------------------------------------------



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##### Table of Contents

|ITEM 7. |  | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|------- |  | -------------------------------------------------------------------------------------



Results of Operations



The following discussion and analysis should be read in conjunction with Item 6, Selected Financial Data and Item 8, Financial
Statements and Supplementary Data included elsewhere herein. Financial results for the periods presented are not fully comparable because of the December 2001 disposition of the Companys European insulation operations.



Year Ended December 27, 2002 Compared to the Year Ended December 28, 2001



Consolidated



Net sales in fiscal 2002 were $323.2 million, a decrease of $2.5 million
from $325.7 million in fiscal 2001. Excluding the results of the European insulation operations, which were divested in December 2001, net sales increased by $20.4 million or 6.7%. This was primarily caused by an 18.1% increase in sales at the
specialty chemicals segment resulting from an increase in sales volume (13.8%) and higher average selling prices (3.9%).



Gross profit increased to $79.7 million or 24.7% of net sales in fiscal 2002 from $75.0 million or 23.0% of net sales in fiscal 2001. Excluding the impact
of the divested European insulation operations, gross profit in fiscal 2002 increased by $17.0 million from $62.7 million in fiscal 2001. This increase was caused by higher sales volumes at the specialty chemicals segment ($4.4 million), higher
selling prices across both operating segments ($3.2 million) and lower energy-related costs at the domestic packaging operations ($3.2 million), combined with improved manufacturing efficiencies at both the packaging and specialty chemicals segments
($6.1 million).



Operating expenses increased by $8.6 million
in fiscal 2002 to $55.8 million. Excluding the results of the European insulation operations and the $10.5 million gain recognized on its sale, operating expenses increased by $6.0 million in fiscal 2002 to $55.8 million. This was primarily caused
by an increase in operating costs at our corporate offices ($6.5 million) and our specialty chemical operations ($1.8 million), which were partially offset by lower operating costs at our packaging operations ($2.4 million).



Income from operations decreased by $3.9 million in fiscal 2002 to $23.9
million. Excluding the impact of the divested European insulation operations and the gain resulting from its sale, income from operations increased by $11.0 million to $23.9 million or 7.4% of net sales from 4.0% in fiscal 2001.



Interest expense decreased by $0.9 million to $21.4 million for fiscal 2002
from $22.3 million for fiscal 2001. This decrease was primarily due to a reduction in long-term debt resulting from the sale of the European insulation operations ($0.6 million), combined with lower interest rates on the Companys revolving
credit facilities ($0.6 million). Included in interest expense for fiscal 2002 and 2001 was $1.1 million of deferred financing fee and premium amortization related to the Companys senior notes. Other expenses decreased by $1.5 million for the
year ended December 27, 2002 primarily as a result of non-recurring costs ($0.7 million) that were incurred in fiscal 2001, as well as decreased currency transaction losses.



The $5.0 million increase in income from unconsolidated affiliates resulted from a gain that caused a net increase in
partners capital from operations in an investment partnership in which the Company serves as a limited partner. This gain represented unrealized gains on investments held by the investment partnership for which there is no established market.
The Company expects that income from unconsolidated affiliates will be substantially lower in fiscal 2003 and subsequent years.



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The Company recorded a $2.9 million provision for income taxes in fiscal 2002, representing a $0.7
million increase over fiscal 2001. This increase was primarily caused by a $3.5 million increase in pre-tax income, partially offset by a reduction in the Companys effective tax rate as compared to fiscal 2001.



Segment Analysis



Packaging Segment



Net sales in the packaging segment in fiscal 2002 were $195.4 million as
compared to $235.9 million in fiscal 2001. Excluding the results of the divested European insulation operations, net sales in fiscal 2002 decreased by $1.8 million or 0.9% over fiscal 2001. This was primarily caused by a decrease in sales volumes
(2.0%), partially offset by higher average selling prices (1.1%). The decrease in sales volumes resulted from a planned rationalization of lower margin business to provide capacity for higher margin business which came on stream during the fourth
quarter of 2002.



Gross profit increased to 27.9% of net sales
in fiscal 2002 from 25.9% of net sales in fiscal 2001. Excluding the impact of the divested European insulation operations, gross profit for fiscal 2002 increased by $5.6 million to $54.4 million. This increase was primarily caused by lower energy
costs ($3.2 million), combined with higher selling prices ($2.1 million) and improved manufacturing efficiencies resulting from engineering projects and technology upgrades ($1.4 million).



Operating expenses decreased by $10.3 million to $24.7 million for fiscal
2002 from $35.0 million for fiscal 2001. Excluding the results of the divested European operations, operating expenses decreased by $2.4 million to 12.7% of net sales in fiscal 2002 from 13.8% of net sales in fiscal 2001. This decrease was primarily
due to lower distribution costs resulting from the reduction in sales volumes ($0.5 million), combined with savings resulting from cost containment initiatives including implemented workforce reductions ($1.7 million).



Income from operations increased by $3.5 million over fiscal 2001 to $29.7
million in fiscal 2002 for the reasons described above. Fiscal 2001 income from operations for the European insulation operations, which were sold on December 12, 2001, was $4.5 million. Excluding these results, income from operations increased by
$8.0 million or 36.8% for fiscal 2002.



Specialty Chemicals
Segment



For fiscal 2002, net sales in the specialty
chemicals business segment increased by $20.6 million (18.1%) to $134.3 million from $113.7 million in fiscal 2001. This was caused by an increase in sales volume (13.8%), primarily in the domestic specialty chemicals operations, and higher average
selling prices (3.9%). Net sales included $9.8 million and $25.6 million of sales to the packaging segment for fiscal 2002 and 2001, respectively, that are eliminated in consolidation. Excluding the impact of the divested European insulation
operations, net sales to the packaging segment were $9.8 million for fiscal 2001.



Gross profit increased by $9.4 million to $21.9 million for fiscal 2002 from $12.5 million for fiscal 2001. This was primarily due to increased sales volumes ($4.4 million) and improved manufacturing efficiency ($7.1
million), combined with a favorable change in the spread between average selling prices and the average cost of the styrene monomer ($1.1 million).



For fiscal 2002, operating expenses increased by $1.8 million to $17.5 million from $15.7 million in fiscal 2001. This increase was primarily caused by
higher distribution costs resulting from increased sales volume ($0.9 million) and an increase in currency transaction losses at the European operations ($0.5 million). Income from operations for fiscal 2002 was $4.4 million, representing a $7.6
million improvement over fiscal 2001 for the reasons described above.



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##### Table of Contents

Corporate and Other



Corporate operating expenses, excluding the $10.5 million gain on the divestiture of the Companys European insulation
operations in 2001, increased by $6.5 million during fiscal 2002. This was primarily caused by an increase in amortization ($1.2 million), insurance ($2.0 million) and compensation to corporate personnel ($3.2 million). Included in the higher
corporate compensation for fiscal 2002 was $2.5 million in additional salary and bonus to our chief executive officer. From 1999 to 2001, our chief executive officers salary and bonus were reduced by 23% or $900,000, based primarily on the
Companys results of operations for those periods. Our chief executive officers compensation for 2002 reflects the positive financial results experienced during 2002 as compared to each of the prior three fiscal periods, due in part to
the divestiture of the European insulation operations in December 2001. While compensation is reviewed annually, we do not anticipate that our chief executive officers compensation will materially increase in either fiscal 2003 or 2004 from
2002 amounts.



Year Ended December 28, 2001 Compared to Year Ended
December 29, 2000



Consolidated



Net sales in fiscal 2001 were $325.7 million, or
$28.0 million below fiscal 2000. This decrease was primarily caused by lower selling prices in the Companys specialty chemical operations, resulting from reductions in the cost of styrene monomer, the Companys primary raw material. Gross
profit increased to 23.0% of net sales in 2001 from 21.6% of net sales in 2000. This was caused by an increase in gross profit as a percentage of net sales at the packaging segment to 25.9%, partially offset by a reduction in gross profit as a
percentage of net sales in the specialty chemicals operations to 11.0%.



Operating expenses decreased by $16.0 million in 2001 to $47.2 million. Excluding the $10.5 million gain on the sale of the Companys European insulation operations, operating expenses decreased by $5.5 million in 2001 to 17.7% of
sales. This favorable change was caused by lower selling, general and administrative expenses at the Companys domestic packaging operations ($1.5 million) and corporate office ($2.4 million), resulting from cost containment initiatives
including implemented workforce reductions. Operating expenses were also favorably impacted by lower distribution costs at the domestic packaging operations ($0.7 million), resulting from reduced sales volumes.



Income from operations increased by $14.5 million in 2001 to $27.9 million.
Excluding the gain on the sale of the European insulation operations, income from operations increased by $4.0 million to 5.3% of net sales from 3.8% of net sales in 2000.



Interest expense for the year ended December 28, 2001 increased by $0.6 million over fiscal 2000. This was caused by an
increase in average outstanding advances under the Companys revolving credit facilities ($0.8 million) and an additional equipment financing ($0.2 million), partially offset by reductions in interest rates ($0.5 million). Other expenses
increased by $1.6 million for the year ended December 28, 2001 primarily as a result of a non-recurring cost associated with a distributor dispute in the domestic packaging operations ($0.7 million) and an increase in currency transaction losses.



Income from unconsolidated affiliates increased by $0.3
million in fiscal 2001 to $1.2 million. This increase resulted from a gain that caused a net increase in partners capital from operations in an investment partnership in which the Company serves as a limited partner. This gain represented
unrealized gains on investments held by the investment partnership for which there is no established market.



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##### Table of Contents

The Company recorded a $2.1 million provision for income taxes in 2001 due to a $12.6 million increase in
pre-tax income over fiscal 2000, for the reasons described above. The increase in the Companys effective tax rate for 2001 reflects the impact of a $0.2 million valuation allowance against net operating loss carryforwards generated by the
Companys European packaging operations, as well as $0.3 million in provision resulting from changes in foreign effective tax rates that affected the benefit created by previously generated net operating loss carryforwards.



Segment Analysis



Packaging and Insulation Segment



Net sales in the packaging and insulation business segment in fiscal 2001
were $235.9 million and were 1.3% lower than fiscal 2000. This decrease was primarily caused by lower sales volumes primarily during the second half of the year at the domestic packaging business ($13.9 million) and lower selling prices in the
Companys European insulation operations ($4.2 million), which were divested in December 2001. The impact of the reduction in sales volumes at the domestic packaging business was almost entirely offset by increased sales prices within the
packaging operations ($13.9 million). 2001 net sales for the European insulation operations, which were sold on December 12, 2001, were $38.8 million.



Gross profit increased to 25.9% of net sales in 2001 from 22.7% of net sales in 2000. This increase was caused by lower raw material costs ($5.1 million),
combined with higher selling prices ($9.6 million), primarily in the domestic packaging operations, and improved manufacturing efficiencies related to raw material production resulting from engineering projects and technology upgrades ($0.7
million). Partially offsetting this was a $2.1 million or 11.1% increase in energy related costs in the domestic packaging operations as well as the impact of lower sales volumes in the domestic operations ($5.1 million). Beginning in June 2001
through February 2002, energy costs at the domestic packaging operations have steadily declined with the February 2002 cost per million British Thermal Units more than 75% below the January 2001 level.



Operating expenses decreased by $2.5 million to 14.8% of net sales in 2001
from $37.5 million or 15.7% of net sales in 2000, primarily due to lower distribution costs ($0.7 million) and lower selling, general and administrative costs ($1.5 million) in the domestic packaging operations, resulting from cost containment
initiatives including implemented workforce reductions. Income from operations increased by $9.6 million over fiscal 2000 to $26.2 million in 2001 for the reasons described above. 2001 income from operations for the European insulation operations,
which were sold on December 12, 2001, was $4.5 million.



Specialty Chemicals Segment



Fiscal 2001 net
sales in the specialty chemicals business segment decreased by $30.4 million to $113.7 million. Net sales included $25.6 million and $32.1 million of sales to the packaging segment for fiscal 2001 and 2000, respectively, that are eliminated in
consolidation. The decrease in net sales from 2000 to 2001 was due to lower selling prices in both the domestic and European operations, resulting from reductions in styrene monomer costs, the segments primary raw material.



Gross profit decreased to 11.0% of net sales in 2001 from 12.8% of net sales
in 2000. This decrease was primarily caused by a contraction between the average selling prices and the cost of styrene monomer in the European operations ($11.2 million), which was partially offset by the expansion between the average selling
prices and the cost of styrene monomer in the North American operations ($2.3 million) and a reduction in fixed costs in the domestic specialty chemicals operations ($0.9 million). This favorable raw material pricing and reduction in fixed costs led
to a $3.0 million increase in gross profit in the domestic operations.



15



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##### Table of Contents

Operating expenses decreased by $0.3 million to $15.7 million in 2001 primarily as a result of lower
distribution ($0.3 million) and reduced selling, general and administrative costs ($0.1 million) at the Companys North American specialty chemicals operations. Income from operations decreased by $5.7 million due to the operating performance
of the European operations, for the reasons described above, which was partially offset by a $3.5 million increase in income from operations at the domestic operations.



Corporate and Other



Corporate operating expenses, excluding the gain on the divestiture of the Companys European insulation operations, decreased by $2.8 million to
$7.0 million for the year ended December 28, 2001. This was caused by a reduction in amortization ($0.7 million) and cost containment initiatives implemented during 2001 ($2.2 million), which focused on outside consulting as well as personnel
related costs.



Liquidity and Capital Resources



During fiscal 2002, the Companys operating activities provided $8.0
million. During the 2002 period, the Company had after-tax cash flow of $19.7 million, as well as an $11.7 million increase in working capital. This increase in working capital was primarily caused by higher inventory ($5.2 million) at our domestic
packaging and specialty chemicals operations, higher accounts receivable ($1.8 million) at our specialty chemicals operations and lower accrued expenses ($4.0 million) at our corporate office, offset by lower accounts receivable ($1.3 million) at
our domestic packaging operations. The increase in inventory primarily resulted from an increase in inventory unit volume (approximately 16%) from December 28, 2001 to December 27, 2002 at our domestic packaging operations as well as higher raw
material costs, primarily styrene monomer, at our specialty chemicals operations. The increase in accounts receivable at the specialty chemicals operations was primarily caused by increased sales during the fourth quarter of fiscal 2002 resulting
from increased sales volumes and average selling prices due to increases in the cost of our primary raw material. Accrued expenses at the corporate office primarily decreased due to a decrease in employee-related accruals. The decrease in accounts
receivable at the domestic packaging operations was primarily due to decreased sales during the fourth quarter of fiscal 2002 resulting from a decrease in average selling prices.



The Company used $10.1 million in investing activities during fiscal 2002. The Company made $10.6 million in capital
expenditures and increased other assets by $1.4 million. Distributions received from investments in unconsolidated affiliates exceeded the additional investments in these affiliates by $1.8 million during fiscal 2002.



As of December 27, 2002, the Company had $32.2 million outstanding under its
revolving credit facilities. Including cash on hand, the Company had $12.5 million of availability under these facilities as of December 27, 2002. On March 11, 2003, the Company issued $135 million of 11% Senior Notes due 2010 and amended its
domestic revolving credit facility to include a $45 million term loan and to increase the revolving credit commitment from $35 million to $45 million. The proceeds were used to repay the existing $159.5 million Series A and Series B Senior Notes due
December 1, 2003 and outstanding borrowings under the existing revolving credit facilities. After taking into account the refinancing of the Companys senior notes and certain restrictions, including borrowing base limitations, the Company
would have had $12.9 million outstanding and $27.7 million of availability under its revolving credit facilities as of December 27, 2002. The principal uses of cash for the next several years will be debt service, capital expenditures and working
capital requirements. The Companys capital expenditures for fiscal years 2001 and 2002 were $12.4 million and $10.6 million, respectively.



As a holding company, the Company is dependent upon dividends and other payments from its subsidiaries to generate the funds necessary to meet its
obligations. Subject to certain limitations, the Company is, and will continue to be, able to control its receipt of dividends and other payments from its



16



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##### Table of Contents

subsidiaries. After taking into account the refinancing of the Companys existing senior notes due December 1, 2003, management believes that cash
generated from operations, together with available borrowings under its revolving credit facilities, will be sufficient to meet the Companys expected operating needs, planned capital expenditures and debt service requirements. There can be no
assurance, however, that sufficient funds will be available from operations or borrowings under its credit agreements to meet the Companys cash needs.



Contractual Obligations and Commercial Commitments



The Company has future obligations for debt repayments, capital leases, future minimum rental and similar commitments under noncancelable operating leases
and purchase obligations as well as contingent obligations related to outstanding letters of credit and guarantees. These obligations as of December 27, 2002 are summarized in the tables below.



|(thousands of dollars)      |  | Payments Due by Period
|--------------------------- |  | ----------------------
|Contractual Obligations     |  | Total                 
|Long-term borrowings(1)     |  | $212,090              
|Capital lease obligations   |  | 3,059                 
|Operating lease obligations |  | 24,484                
|Purchase obligations(2)     |  | 263,772               
|                            |  |                       
|                            |  | $503,405              
|                            |  |                       



|(1) | On March 11, 2003, the Company issued $135.0 million of 11.0% Senior Notes due 2010 and amended its domestic revolving credit facility and extended the maturity to
March 2008.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | As discussed in Note 5 to the Companys consolidated financial statements, these amounts represent commitments under long-term styrene monomer supply contracts.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------



|(thousands of dollars)       |  | Amount of Commitment Expiration Per Period
|---------------------------- |  | ------------------------------------------
|Other Commercial Commitments |  | TotalAmountsCommitted                     
|Letters of credit            |  | $2,432                                    



Critical Accounting Policies and
Estimates



The Company prepares its financial
statements in conformity with GAAP. The preparation of such financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at
the date of those financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.



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##### Table of Contents

The Company discloses its significant accounting policies in the notes to its audited consolidated
financial statements. Judgments and estimates of uncertainties are required in applying the Companys accounting policies in certain areas. Following are some of the areas requiring significant judgments and estimates: determination of an
assets useful life; estimates of allowances for bad debts; cash flow and valuation assumptions in performing asset impairment tests of long-lived assets; valuation assumption in determining the fair value of investments held by unconsolidated
affiliates; and estimates of realizability of deferred tax assets.



There are numerous critical assumptions that may influence accounting estimates in these and other areas. We base our critical assumptions on historical experience, third-party data and on various other estimates we believe to be
reasonable. Certain of the more critical assumptions include:



Bad Debt Risk



| |  | Credit worthiness of specific customers and aging of customer balances
| | - | ----------------------------------------------------------------------

| |  | Contractual rights and obligations
| | - | ----------------------------------

| |  | General and specific economic conditions
| | - | ----------------------------------------



Depreciable Lives of Plant and Equipment



| |  | Changes in technological advances
| | - | ---------------------------------

| |  | Wear and tear
| | - | -------------

| |  | Changes in market demand
| | - | ------------------------



Asset Impairment Determinations



| |  | Intended use of assets and expected future cash flows
| | - | -----------------------------------------------------

| |  | Industry specific trends and economic conditions
| | - | ------------------------------------------------

| |  | Customer preferences and behavior patterns
| | - | ------------------------------------------

| |  | Impact of regulatory initiatives
| | - | --------------------------------



Fair Value of Investments Held by Unconsolidated Affiliates



| |  | Expected future cash flows of underlying investments
| | - | ----------------------------------------------------

| |  | Changes in market demand
| | - | ------------------------

| |  | Industry specific trends and economic conditions
| | - | ------------------------------------------------



Deferred Taxes



| |  | Expected future profitability and cash flows
| | - | --------------------------------------------

| |  | Impact of regulatory initiatives
| | - | --------------------------------

| |  | Timing of reversals of existing temporary differences between book and taxable income
| | - | -------------------------------------------------------------------------------------



Recently Issued Accounting Standards



In June 2001, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 143,
Accounting for Asset Retirement Obligations. SFAS No. 143 addresses financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs. The Company is
required to adopt the provisions of this pronouncement no later than the beginning of fiscal 2003. The Company does not believe this Statement will have a material effect on the Companys financial statements.



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In August 2001, the FASB issued SFAS No. 144, Accounting for the Impairment or Disposal of
Long-Lived Assets. SFAS No. 144 addresses financial accounting and reporting for the impairment or disposal of long-lived assets. The Company was required to adopt the provisions of this pronouncement in the beginning of fiscal 2002. The
adoption had no effect on the Companys financial statements.



In April 2002, the FASB issued SFAS No. 145, Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections. This Statement rescinds SFAS No. 4, Reporting Gains and Losses
from Extinguishment of Debt, and SFAS No. 64, Extinguishments of Debt Made to Satisfy Sinking-Fund Requirements. The Statement requires gains and losses from debt extinguishments that are used as part of the Companys risk
management strategy to be classified as income from operations rather than as extraordinary items, net of tax. The Company adopted this Statement during the fourth quarter of its year ended December 27, 2002. The impact on the Company was to
reclassify the extraordinary item recorded during the quarter ended March 29, 2002 to income from continuing operations.



In December 2002, the FASB issued SFAS No. 148, Accounting for Stock-Based CompensationTransition and Disclosure. SFAS No. 148 amends
the disclosure requirements of SFAS No. 123, Accounting for Stock-Based Compensation, to require more prominent and frequent disclosures in financial statements. Also, SFAS No. 148 provides alternative methods of transition for a
voluntary change to the fair value based method of accounting for stock-based employee compensation. The Company has included the interim disclosures prescribed by SFAS No. 148.



In January 2003, the FASB issued Interpretation No. 46, Consolidation of Variable Interest Entities an interpretation
of ARB No. 51. This Interpretation clarifies the application of Accounting Research Bulletin No. 51, Consolidated Financial Statements, to certain entities in which equity investors do not have the characteristics of a controlling
financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. The Interpretation applies immediately to variable interest entities created
after January 31, 2003, and to variable interest entities in which an enterprise obtains an interest after that date. It applies in the first fiscal year or interim period beginning after December 15, 2003, to variable interest entities in which an
entity holds a variable interest that it acquired prior to February 1, 2003. Based on the Companys most recent evaluation, the Company believes it will have to consolidate Radnor Investments, L.P. beginning with the Companys Quarterly
Report on Form 10-Q for the quarter ended March 26, 2004. The Company expects this will cause an increase to the investment assets on its consolidated balance sheet with minority interest being recorded for the 80% of Radnor Investments, L.P. owned
by the general partner of Radnor Investments, L.P. The Company does not anticipate that the adoption of FIN 46 will have any material effect on the consolidated net income or the cash flow of the Company.



Forward Looking Statements



The statements contained in this Annual Report that are not historical
facts, including but not limited to raw material prices, are based on current expectations. These statements are forward looking (as defined in the U.S. Private Securities Litigation Reform Act of 1995) in nature and involve a number of risks and
uncertainties. Actual results may vary materially due to risks relating to raw material price volatility, dependence on key customers, international operations, dependence on key personnel and environmental matters, as well as general business and
economic conditions, both domestic and international, and other risks that may be described from time to time in the reports that the Company files with the Securities and Exchange Commission. See BusinessRaw Materials,
BusinessRisks Attendant to Foreign Operations, BusinessCompetition, BusinessEmployees, BusinessEnvironmental Matters, and Quantitative and Qualitative Disclosures about
Market Risk.



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##### Table of Contents

|ITEM 7A. |  | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|-------- |  | ----------------------------------------------------------



The Companys market risk is the potential loss arising from adverse changes in interest rates. The Companys long-term debt obligations are
mostly at fixed interest rates and denominated in U.S. dollars. The Company manages its interest rate risk by monitoring trends in interest rates as a basis for determining whether to enter into fixed rate or variable rate agreements. Market risk is
estimated as the potential increase in fair value of the Companys long-term debt obligations resulting from a hypothetical one-percent decrease in interest rates and amounts to approximately $6.7 million over the term of the debt.



Although the Company continues to evaluate derivative financial
instruments to manage foreign currency exchange rate changes, the Company does not currently hold derivatives for managing these risks or for trading purposes.



|ITEM 8. |  | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|------- |  | -------------------------------------------



|Radnor Holdings Corporation and Subsidiaries                                                                                          |  |     
|------------------------------------------------------------------------------------------------------------------------------------- |  | ----
|                                                                                                                                      | 
|Independent Auditors Report                                                                                                          |  | F-1 
|Report of Independent Public Accountants                                                                                              |  | F-2 
|Consolidated Balance Sheets as of December 27, 2002 and December 28, 2001                                                             |  | F-3 
|Consolidated Statements of Operations for the Fiscal Years Ended December 27, 2002, December 28, 2001 and December 29, 2000           |  | F-4 
|Consolidated Statements of Stockholders Equity for the Fiscal Years Ended December 27, 2002, December 28, 2001 and December 29, 2000 |  | F-5 
|Consolidated Statements of Cash Flows for the Fiscal Years Ended December 27, 2002, December 28, 2001 and December 29, 2000           |  | F-6 
|Notes to Consolidated Financial Statements                                                                                            |  | F-8 
|                                                                                                                                      | 
|Radnor Investments, L.P.                                                                                                              |  |     
|                                                                                                                                      | 
|Independent Auditors Report                                                                                                          |  | F-26
|Statements of Assets, Liabilities and Partners Capital as of December 31, 2002 and 2001 (unaudited)                                  |  | F-27
|Statements of Operations for the Years Ended December 31, 2002, 2001 (unaudited) and 2000 (unaudited)                                 |  | F-28
|Statements of Changes in Partners Capital for the Years Ended December 31, 2002, 2001 (unaudited) and 2000 (unaudited)               |  | F-29
|Statements of Cash Flows for the Years Ended December 31, 2002, 2001 (unaudited) and 2000 (unaudited)                                 |  | F-30
|Statements of Investments as of December 31, 2002 and 2001 (unaudited)                                                                |  | F-31
|Notes to Financial Statements as of December 31, 2002, 2001 (unaudited) and 2000 (unaudited)                                          |  | F-32



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##### Table of Contents

|ITEM 9. |  | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|------- |  | ------------------------------------------------------------------------------------



On June 27, 2002, the Company dismissed Arthur Andersen LLP (Arthur Andersen) as its independent public
accountants and engaged KPMG LLP (KPMG) to serve as our independent public accountants for the fiscal year ended December 27, 2002. The decision to change independent public accountants was approved by our Board of Directors.



Arthur Andersens reports on the our consolidated financial
statements for each of the fiscal years ended December 28, 2001 and December 29, 2000 did not contain an adverse opinion or disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope or accounting principles.



During the fiscal years ended December 28, 2001 and December
29, 2000 and through June 27, 2002, there were no disagreements with Arthur Andersen on any matter of accounting principle or practice, financial statement disclosure, or auditing scope or procedure which, if not resolved to Arthur Andersens
satisfaction, would have caused them to make reference to the subject matter in connection with their report on our consolidated financial statements for such years; and there were no reportable events as defined in item 304(a)(1)(v) of Regulation
S-K.



Radnor Holdings Corporation provided both Arthur Andersen
and KPMG with a copy of the foregoing disclosures. We requested and received from Arthur Andersen a letter, dated June 27, 2002, stating its agreement with such statements and filed the same as Exhibit 16.1 to our report on Form 8-K filed on June
27, 2002.



During the fiscal years ended December 28, 2001 and
December 29, 2000 and through the date of our decision, the Company did not consult KPMG with respect to the application of accounting principles to a specified transaction either completed or proposed, or the type of audit opinion that might be
rendered on our consolidated financial statements, or any other matters or reportable events as set forth in Items 304(a)(2)(i) and (ii) of Regulation S-K.



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##### Table of Contents

PART III



|ITEM 10. |  | DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
|-------- |  | --------------------------------------------------



Directors and Executive Officers



The directors and executive officers of the Company and their ages as of March 11, 2003 are as follows:



|Name                   |  | Age |  | Position                                                   
|---------------------- |  | --- |  | -----------------------------------------------------------
|Michael T. Kennedy     |  | 48  |  | President, Chief Executive Officer and Director            
|Michael V. Valenza     |  | 43  |  | Senior Vice President  Finance and Chief Financial Officer
|Richard C. Hunsinger   |  | 54  |  | Senior Vice President  Sales and Marketing                
|Donald D. Walker       |  | 61  |  | Senior Vice President  Operations                         
|John P. McNiff         |  | 42  |  | Senior Vice President  Corporate Development and Director 
|R. Radcliffe Hastings  |  | 52  |  | Senior Vice President, Treasurer and Director              
|John P. McKelvey       |  | 62  |  | Senior Vice President  Human Resources and Administration 
|Van D. Groenewold      |  | 70  |  | Vice President  Engineering                               
|Caroline J. Williamson |  | 35  |  | Vice President and Corporate Counsel                       
|Paul M. Finigan        |  | 48  |  | Director                                                   



Michael T.
Kennedy has served as President, Chief Executive Officer and as a director of the Company since its formation in November 1991. Between March 1985 and July 1990, Mr. Kennedy served as Chief Financial Officer of Airgas, Inc., a New York Stock
Exchange-listed distributor of industrial gases.



Michael V.
Valenza has served as Senior Vice President-Finance and Chief Financial Officer of the Company since April 1993. He joined the Company in September 1992 as Director of Finance. From 1984 until joining the Company, Mr. Valenza served in a variety
of positions with Arthur Andersen LLP, most recently as a manager in the Enterprise Group.



Richard C. Hunsinger has served as Senior Vice President-Sales and Marketing of the Company since its formation in November 1991. From 1979 through August 1991, Mr. Hunsinger served in various management
positions, including Vice President of Sales and Marketing, for Winkler/Flexible Products, Inc., a former division of The Coca Cola Company.



Donald D. Walker has served as Senior Vice President-Operations of the Company since November 1992. Mr. Walker served as Vice President of
Manufacturing and as Director of Manufacturing of the Company from February 1992 through November 1992. From 1969 until February 1992, Mr. Walker served in various management positions with Scott Container Products Group, Inc. (WinCups
predecessor), WMF Corporation and Thompson Industries.



John
P. McNiff has served as Senior Vice President-Corporate Development of the Company since its formation in November 1991 and as a director since May 1997. Previously, Mr. McNiff was Vice President-Corporate Development of Airgas, Inc., a New York
Stock Exchange-listed distributor of industrial gases. Mr. McNiff is also a director of Chartwell Investment Partners, LP.



R. Radcliffe Hastings has served as Senior Vice President and Treasurer of the Company since June 1996 and as a director since May 1997.
Previously, Mr. Hastings was with Continental Bank, N.A. and its successor, Bank of America, for 18 years. Mr. Hastings held a variety of management positions in the U.S. banking group and in Bank of Americas securities operation, BA
Securities, Inc.



22



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##### Table of Contents

John P. McKelvey has served as Senior Vice President-Human Resources and Administration for the
Company since March 22, 2002. From October 1992 through March 2002, Mr. McKelvey was the Vice President-Human Resources and Quality Assurance for the Company. From February 1992 until October 1992, Mr. McKelvey was Director of Human
Resources for the Company. From 1971 until joining the Company, Mr. McKelvey served in a variety of human resources management positions for Scott Container Products Group, Inc., Texstyrene Corporation, WMF Corporation and Thompson Industries.



Van D. Groenewold has served as Vice
President-Engineering for the Company since November 1992. From February 1992 until November 1992, Mr. Groenewold was Director of Engineering for the Company. From 1982 until joining the Company, Mr. Groenewold held various engineering and quality
assurance management positions with Scott Container Products Group, Inc., WMF Corporation and Thompson Industries.



Caroline J. Williamson has served as Vice President and Corporate Counsel of the Company since March 1997. From March 1996 to March 1997, Ms.
Williamson served as counsel for Aetna U.S. Healthcare. From September 1992 to March 1996, Ms. Williamson was an associate with Duane Morris LLP.



Paul M. Finigan has served as a director of the Company since July 2000. Mr. Finigan has served counsel to the law firm of Day Berry & Howard,
LLP since October 2002. From November 1999 to June 2002, Mr. Finigan served as Chief Legal Officer of Lumenos, Inc. Mr. Finigan is also a director of SkinHealth, Inc. where he served as Executive Vice President from March 1999 to November 1999. From
November 1988 to September 1997, Mr. Finigan served as Senior Vice President and General Counsel of Value Health, Inc.



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##### Table of Contents

|ITEM 11. |  | EXECUTIVE COMPENSATION
|-------- |  | ----------------------



Officers of the Company who serve as directors are not compensated for serving as directors of the Company. The Companys non-officer director
receives an annual retainer of $20,000 for his services as director. In addition, all directors are reimbursed for their expenses incurred in attending meetings. The following table sets forth certain information concerning the compensation paid to
the Companys chief executive officer and the Companys four other most highly compensated executive officers (the Named Executive Officers) whose total annual salary and bonus exceeded $100,000 for the year ended December 27,
2002:



Summary Compensation Table



|                                                                               |  |                |  | Annual Compensation            |  |                              |  |                            
|------------------------------------------------------------------------------ |  | -------------- |  | ------------------------------ |  | ---------------------------- |  | ---------------------------
|Name and Principal Position                                                    |  | Year           |  | Salary                         |  | Bonus                        |  | Other AnnualCompensation(1)
|Michael T. Kennedy President and Chief Executive Officer                       |  | 2002 2001 2000 |  | $3,000,000 2,500,000 2,500,000 |  | $2,500,000 500,000 1,130,000 |  | $152,087 87,112 103,255    
|                                                                               |  |                |  |                                | 
|R. Radcliffe Hastings Senior Vice President and Treasurer                      |  | 2002 2001 2000 |  | 500,000 300,000 300,000        |  |  300,000 125,000            |  |                         
|                                                                               |  |                |  |                                | 
|Michael V. Valenza Senior Vice President - Finance and Chief Financial Officer |  | 2002 2001 2000 |  | 300,000 275,000 275,000        |  |  200,000                   |  |                         
|                                                                               |  |                |  |                                | 
|Richard C. Hunsinger Senior Vice President - Sales and Marketing               |  | 2002 2001 2000 |  | 300,000 275,000 275,000        |  |  200,000                   |  |                         
|                                                                               |  |                |  |                                | 
|Donald D. Walker Senior Vice President- Operations                             |  | 2002 2001 2000 |  | 300,000 275,000 275,000        |  |  200,000                   |  |                         

---

|(1) | In accordance with the rules of the Securities and Exchange Commission, other compensation in
the form of perquisites and other personal benefits has been omitted in those instances where the aggregate amount of such perquisites and other personal benefits constituted less than the lesser of $50,000 or 10% of the total of annual salary and
bonuses for the officer for such year.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Represents transportation costs paid by the Company on behalf of Mr. Kennedy.
|--- | -----------------------------------------------------------------------------

|(3) | Includes $4,760 of matching contributions by the Company under its 401(k) Retirement Savings Plan and premiums of $71,054, $71,896 and $94,849 in 2002, 2001 and
2000, respectively, paid by the Company with respect to a supplemental life insurance policy for the benefit of Mr. Kennedy.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | Represents a matching contribution by the Company under its 401(k) Retirement Savings Plan.
|--- | -------------------------------------------------------------------------------------------



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##### Table of Contents

The following table sets forth information with respect to options to purchase the Companys
Nonvoting Common Stock held at December 27, 2002 by the Named Executive Officers. No options were granted to or exercised by such persons during the fiscal year ended December 27, 2002.



|                      |  | Number of SecuritiesUnderlying UnexercisedOptions at December 27, 2002 |  | Value of Unexercised In-the-Money Options at December 27, 2002(1)
|--------------------- |  | ---------------------------------------------------------------------- |  | -----------------------------------------------------------------
|Name                  |  | Exercisable                                                            |  | Unexercisable                                                    
|Michael T. Kennedy    |  |                                                                       |  |                                                                 
|R. Radcliffe Hastings |  |                                                                       |  |                                                                 
|Michael V. Valenza    |  | 130                                                                    |  |                                                                 
|Richard C. Hunsinger  |  | 100                                                                    |  |                                                                 
|Donald D. Walker      |  | 125                                                                    |  |                                                                 

---

|(1) | Based on the estimated fair value of $11,800 per share of the underlying securities, as determined by the Companys Board of Directors.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------



Employment Agreements



In May 1993, the Company entered into an employment agreement with Richard
C. Hunsinger, which was amended in January 1996, pursuant to which Mr. Hunsinger serves as Senior Vice PresidentSales and Marketing of the Company. The agreement was for an initial term of seven years and six months and, absent 180 days
prior written notice by either party before the end of any renewal term, renews for twelve months from year to year. Under the agreement as amended, Mr. Hunsinger is entitled to an annual salary of not less than $145,000 beginning in 1996, subject
to annual cost of living increases. The agreement contains a covenant not to engage in any business that is competitive with the business of the Company in any geographical area in which it does business during the term of the agreement and for a
period of two years immediately following the termination of the agreement.



In April 1996, the Company entered into an employment agreement with R. Radcliffe Hastings, pursuant to which Mr. Hastings serves as Senior Vice President and Treasurer of the Company. The agreement was for an initial
term of three years and, absent 90 days prior written notice by either party before the end of any renewal term, renews for twelve months from year to year. Mr. Hastings is entitled to an annual salary of not less than $125,000, subject to annual
review by the Board of Directors. The agreement contains a covenant not to compete in any business that is competitive with the business of the Company in the United States during the term of the agreement.



Compensation Committee Interlocks and Insider Participation



Michael T. Kennedy, the Companys Chief Executive Officer and a
director, is also a director of SkinHealth, Inc. of which Paul Finigan, a director of the Company, is a director.



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##### Table of Contents

|ITEM 12. |  | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
|-------- |  | --------------------------------------------------------------



The following table sets forth certain information as of March 11, 2003, with respect to each person who is known by the Company to own beneficially 5% or
more of each class of voting securities of the Company.



|Name of Individual or Identity of Group                                        |  | Title of Class of Capital Stock |  | Number of Shares Beneficially Owned |  | Percent of Class
|------------------------------------------------------------------------------ |  | ------------------------------- |  | ----------------------------------- |  | ----------------
|Michael T. Kennedy Three Radnor Corporate Center Suite 300 Radnor, PA 19087    |  | Voting Common Stock             |  | 480                                 |  | 80.0%           
|John P. McNiff Three Radnor Corporate Center Suite 300 Radnor, PA 19087        |  | Voting Common Stock             |  | 60                                  |  | 10.0%           
|R. Radcliffe Hastings Three Radnor Corporate Center Suite 300 Radnor, PA 19087 |  | Voting Common Stock             |  | 60                                  |  | 10.0%           



The following table
sets forth certain information as of December 27, 2002, with respect to compensation plans under which equity securities of the Company are authorized for issuance.



|Plan Category                                              |  | Number of securities tobe issued upon exerciseof outstanding options,warrants and rights |  | Weighted-averageexercise price ofoutstanding options,warrants and rights |       | Number of securitiesremaining available forfuture issuance underequity compensationplans(1)
|---------------------------------------------------------- |  | ---------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------ | ----- | -------------------------------------------------------------------------------------------
|Equity Compensation plans approved by security holders     |  | 736                                                                                      |  | $                                                                        | 5,523 |                                                                                            
|Equity Compensation plans not approved by security holders |  |                                                                                         |  |                                                                          |      |                                                                                            
|                                                           |  |                                                                                          |  |                                                                          |       |                                                                                            
|Total                                                      |  | 736                                                                                      |  | $                                                                        | 5,523 |                                                                                            
|                                                           |  |                                                                                          |  |                                                                          |       |                                                                                            



|(1) | Excludes the number of securities to be issued upon exercise of outstanding options, warrants and rights.
|--- | ---------------------------------------------------------------------------------------------------------



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The following table sets forth certain information as of March 11, 2003, with respect to beneficial
ownership of each class of equity securities of the Company by (a) the directors of the Company, (b) the Named Executive Officers and (c) the directors and all executive officers of the Company as a group.



|Name of Individual or Identity of Group                      |  | Title of Class of Capital Stock                                           |  | Number of Shares Beneficially Owned(1) |     |  | Percent of Class(2)
|------------------------------------------------------------ |  | ------------------------------------------------------------------------- |  | -------------------------------------- | --- |  | -------------------
|Michael T. Kennedy                                           |  | Voting Common Stock Class B Nonvoting
Common Stock Nonvoting Common Stock |  | 480 3,760                             | (3) |  | 80.0% 69.6%       
|                                                             |  |                                                                           | 
|Michael V. Valenza                                           |  | Voting Common Stock Class B Nonvoting
Common Stock Nonvoting Common Stock |  |   150                                |     |  |   40.0%          
|                                                             |  |                                                                           | 
|Richard C. Hunsinger                                         |  | Voting Common Stock Class B Nonvoting
Common Stock Nonvoting Common Stock |  |   150                                |     |  |   43.5%          
|                                                             |  |                                                                           | 
|Donald D. Walker                                             |  | Voting Common Stock Class B Nonvoting
Common Stock Nonvoting Common Stock |  |   182                                |     |  |   49.2%          
|                                                             |  |                                                                           | 
|R. Radcliffe Hastings                                        |  | Voting Common Stock Class B Nonvoting
Common Stock Nonvoting Common Stock |  | 60 540                                |     |  | 10.0% 10.0%       
|                                                             |  |                                                                           | 
|John P. McNiff                                               |  | Voting Common Stock Class B Nonvoting
Common Stock Nonvoting Common Stock |  | 60 540                                |     |  | 10.0% 10.0%       
|                                                             |  |                                                                           | 
|Paul M. Finigan                                              |  | Voting Common Stock Class B Nonvoting
Common Stock Nonvoting Common Stock |  |                                     |     |  |                 
|                                                             |  |                                                                           | 
|Directors and all executive officers as a group (10 persons) |  | Voting Common Stock Class B Nonvoting
Common Stock Nonvoting Common Stock |  | 600 4,840 655                          |     |  | 100.0% 89.6% 89.1% 

---

|(1) | Includes shares of Nonvoting Common Stock that certain individuals have the right to acquire, on or before May 11, 2003, upon the exercise of stock options granted
pursuant to the Companys Equity Incentive Plan, as follows: Michael V. Valenza-130; Richard C. Hunsinger-100; Donald D. Walker-125; and the directors and all executive officers as a group-490.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(2) | Based upon 600, 5,400 and 245 outstanding shares of Voting Common Stock, Class B Nonvoting Common Stock and Nonvoting Common Stock, respectively, as well as the
shares the respective individual has the right to acquire on or before May 11, 2003.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(3) | Includes 1,573 shares held in a grantor retained annuity trust created by Mr. Kennedy. Mr. Kennedy is entitled to receive 25 of these shares pursuant to the
instrument governing the trust and retains the right to acquire the balance of these shares for value from the trust under certain circumstances specified in the instrument governing the trust.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

|ITEM 13. |  | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
|-------- |  | ----------------------------------------------



The Company has made interest-bearing advances to Michael T. Kennedy, the Companys Chief Executive Officer, for personal use. As of December 27,
2002, outstanding principal and interest from these advances totaled $4.3 million, which was the highest amount outstanding in fiscal 2002. These advances accrue interest monthly at the 100% short-term semi-annual applicable federal rate for the
current month.



Vincent F. Garrity, Jr., a director of the
Company through March 4, 2002, is a partner of Duane Morris LLP, which serves as the Companys primary legal counsel.



The Company provides certain management services to a related company of which Mr. Kennedy is also a director for which the Company receives a fee. During
2002, the Company earned management fees of $0.5 million. At December 27, 2002, unpaid management fees totaled $0.9 million.



|ITEM 14. |  | CONTROLS AND PROCEDURES
|-------- |  | -----------------------



Under the supervision of the Chief Executive Officer and Chief Financial Officer, the Companys management conducted an evaluation of the
effectiveness of the design and operation of the Companys disclosure controls and procedures within 90 days of the filing date of this annual report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded
that the design and operation of its disclosure controls and procedures have been effective. There have been no significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of
such evaluation.



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##### Table of Contents

PART IV



|ITEM 15. |  | EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
|-------- |  | ---------------------------------------------------------------



|(a) | Documents filed as part of this Annual Report
|--- | ---------------------------------------------



|1. | The consolidated financial statements of the Company and its subsidiaries are listed in Item 8.
|-- | -----------------------------------------------------------------------------------------------



|2. | Financial Statement Schedules - None.
|-- | -------------------------------------



|3. | Exhibits:
|-- | ---------



3.1

Restated Certificate of Incorporation of Radnor Holdings Corporation, as amended (Incorporated by reference to Exhibit No. 3.1 filed with the Form 10-K for the year ended December
25, 1998 filed by Radnor Holdings Corporation)3.2

Bylaws of Radnor Holdings Corporation (Incorporated by reference to Exhibit 3.2 filed with Form S-4 Registration Statement, filed by Radnor Holdings Corporation, WinCup Holdings,
Inc., Radnor Chemical Corporation (formerly SP Acquisition Co.), StyroChem U.S., Ltd. (formerly StyroChem U.S., Ltd. and StyroChem International, Inc.), StyroChem Canada, Ltd. (formerly StyroChem International, Ltd.) and Radnor Management, Inc.,
Commission File No. 333-19495 (the Original S-4))4.1

Indenture, dated as of December 5, 1996 among Radnor Holdings Corporation, WinCup Holdings, Inc., Radnor Chemical Corporation, StyroChem U.S., Ltd., StyroChem Canada, Ltd. and
First Union National Bank, including form of Notes and Guarantees (Incorporated by reference to Exhibit 4.1 filed with the Original S-4)4.2

First Supplemental Indenture, dated as of December 17, 1996 among Radnor Holdings Corporation, WinCup Holdings, Inc., Radnor Chemical Corporation, StyroChem U.S., Ltd., StyroChem
Canada, Ltd., Radnor Management, Inc. and First Union National Bank (Incorporated by reference to Exhibit No. 4.2 filed with the Form 10-K for the year ended December 26, 1997 filed by Radnor Holdings Corporation)4.3

Second Supplemental Indenture, dated as of October 15, 1997 among Radnor Holdings Corporation, WinCup Holdings, Inc., Radnor Chemical Corporation, StyroChem U.S., Ltd., StyroChem
Canada, Ltd., Radnor Management, Inc., StyroChem Europe (The Netherlands) B.V., StyroChem Finland Oy, ThermiSol Denmark ApS, ThermiSol Finland Oy, ThermiSol Sweden AB and First Union National Bank (Incorporated by reference to Exhibit No. 4.3 filed
with the Form 10-K for the year ended December 26, 1997 filed by Radnor Holdings Corporation)4.4

Third Supplemental Indenture, dated as of February 9, 1998 among Radnor Holdings Corporation, WinCup Holdings, Inc., Radnor Chemical Corporation, StyroChem U.S., Ltd., StyroChem
Canada, Ltd., Radnor Management, Inc., StyroChem Europe (The Netherlands) B.V., StyroChem Finland Oy, ThermiSol Denmark ApS, ThermiSol Finland Oy, ThermiSol Sweden AB, Radnor Delaware, Inc. and First Union National Bank (Incorporated by reference to
Exhibit No. 4.4 filed with the Form 10-K for the year ended December 26, 1997 filed by Radnor Holdings Corporation)4.5

Fourth Supplemental Indenture, dated as of July 16, 1998 among Radnor Holdings Corporation, WinCup Holdings, Inc., Radnor Chemical Corporation, StyroChem U.S., Ltd., Radnor
Management, Inc., Radnor Delaware, Inc. and First Union National Bank (Incorporated by reference to Exhibit No. 4.1 filed with the Form 10-Q for the quarter ended June 26, 1998 filed by Radnor Holdings Corporation)4.6

Fifth Supplemental Indenture, dated as of January 21, 1999 among Radnor Holdings Corporation, WinCup Holdings, Inc., Radnor Chemical Corporation, Radnor Delaware, Inc., Radnor
Management, Inc., StyroChem U.S., Ltd., WinCup Texas, Ltd., StyroChem GP, L.L.C., StyroChem LP, L.L.C., WinCup GP, L.L.C. and WinCup LP, L.C.C. and First Union National Bank (Incorporated by reference to Exhibit No. 4.6 filed with the Form 10-K for
the year ended December 25, 1998 filed by Radnor Holdings Corporation)




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4.7

Sixth Supplemental Indenture, dated as of March 23, 1999 among Radnor Holdings Corporation, WinCup Holdings, Inc., Radnor Chemical Corporation, Radnor Delaware, Inc., Radnor
Management, Inc., StyroChem U.S., Ltd., WinCup Texas, Ltd., StyroChem GP, L.L.C., StyroChem LP, L.L.C., WinCup GP, L.L.C. and WinCup LP, L.C.C., Radnor Management Delaware, Inc., StyroChem Delaware, Inc. and WinCup Europe Delaware and First Union
National Bank (Incorporated by reference to Exhibit No. 4.7 filed with the Form 10-K for the year ended December 31, 1999 filed by Radnor Holdings Corporation)4.8

Seventh Supplemental Indenture, dated as of January 29, 2002 among Radnor Holdings Corporation, WinCup Holdings, Inc., Radnor Chemical Corporation, Radnor Management, Inc.,
StyroChem U.S., Ltd., WinCup Texas, Ltd., StyroChem GP, L.L.C., StyroChem LP, L.L.C., WinCup GP, L.L.C., WinCup LP, L.C.C., Radnor Management Delaware, Inc., StyroChem Delaware, Inc., WinCup Europe Delaware, Inc., StyroChem Delaware, Inc., Radnor
Delaware II, Inc., and First Union National Bank (Incorporated by reference to Exhibit 4.8 filed with the Form 10-K for the year ended December 28, 2001 filed by Radnor Holdings Corporation (the 2001 10-K))4.9

Exchange and Registration Rights Agreement, dated as of December 5, 1996 among Radnor Holdings Corporation, WinCup Holdings, Inc., Radnor Chemical Corporation, StyroChem U.S.,
Ltd., StyroChem Canada, Ltd., Alex. Brown & Sons Incorporated and NatWest Capital Markets Limited (Incorporated by reference to Exhibit 4.2 filed with the Original S-4)4.10

Indenture, dated as of October 15, 1997 among Radnor Holdings Corporation, WinCup Holdings, Inc., Radnor Chemical Corporation, StyroChem U.S., Ltd., Radnor Management, Inc. and
First Union National Bank, including form of Notes and Guarantees (Incorporated by reference to Exhibit 4.1 filed with Form S-4 Registration Statement, filed by Radnor Holdings Corporation, WinCup Holdings, Inc., Radnor Chemical Corporation,
StyroChem U.S., Ltd., and Radnor Management, Inc., Commission File No. 333-42101 (the Series B S-4))4.11

First Supplemental Indenture, dated as of February 9, 1998 among Radnor Holdings Corporation, WinCup Holdings, Inc., Radnor Chemical Corporation, StyroChem U.S., Ltd., Radnor
Management, Inc., Radnor Delaware, Inc. and First Union National Bank (Incorporated by reference to Exhibit 4.7 filed with the Form 10-K for the year ended December 26, 1997 filed by Radnor Holdings Corporation)4.12

Second Supplemental Indenture, dated as of January 21, 1999 among Radnor Holdings Corporation, WinCup Holdings, Inc., Radnor Chemical Corporation, Radnor Delaware, Inc., Radnor
Management, Inc., StyroChem U.S., Ltd., WinCup Texas, Ltd., StyroChem GP, L.L.C., StyroChem LP, L.L.C., WinCup GP, L.L.C. and WinCup LP, L.C.C. and First Union National Bank (Incorporated by reference to Exhibit No. 4.10 filed with the Form 10-K for
the year ended December 25, 1998 filed by Radnor Holdings Corporation)4.13

Third Supplemental Indenture, dated as of March 23, 1999 among Radnor Holdings Corporation, WinCup Holdings, Inc., Radnor Chemical Corporation, Radnor Delaware, Inc., Radnor
Management, Inc., StyroChem U.S., Ltd., WinCup Texas, Ltd., StyroChem GP, L.L.C., StyroChem LP, L.L.C., WinCup GP, L.L.C. and WinCup LP, L.C.C., Radnor Management Delaware, Inc., StyroChem Delaware, Inc. and WinCup Europe Delaware and First Union
National Bank (Incorporated by reference to Exhibit No. 4.12 filed with the Form 10-K for the year ended December 31, 1999 filed by Radnor Holdings Corporation)4.14

Fourth Supplemental Indenture, dated as of January 29, 2002 among Radnor Holdings Corporation, WinCup Holdings, Inc., Radnor Chemical Corporation, Radnor Management, Inc.,
StyroChem U.S., Ltd., WinCup Texas, Ltd., StyroChem GP, L.L.C., StyroChem LP, L.L.C., WinCup GP, L.L.C., WinCup LP, L.C.C., Radnor Management Delaware, Inc., StyroChem Delaware, Inc., WinCup Europe Delaware, Inc., StyroChem Europe Delaware, Inc.,
Radnor Delaware II, Inc., and First Union National Bank (Incorporated by reference to Exhibit 4.14 filed with the 2001 10-K)4.15

Exchange and Registration Rights Agreement, dated as of October 15, 1997 among Radnor Holdings Corporation, WinCup Holdings, Inc., Radnor Chemical Corporation, StyroChem U.S.,
Ltd., Radnor Management, Inc., Bear, Stearns & Co. Inc., NatWest Capital Markets Limited and BT Alex. Brown Incorporated (Incorporated by reference to Exhibit 4.2 filed with the Series B S-4)




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##### Table of Contents

*10.1

Contract of Sale, dated as of December 5, 1996, among Chevron Chemical Company, Radnor Chemical Corporation, StyroChem U.S., Ltd. and StyroChem Canada, Ltd. (Incorporated by
reference to Exhibit No. 10.11 filed with Amendment No.1 to the Original S-4)**10.2

First Amendment to Styrene Monomer Contract of Sale, dated as of October 1, 1998, among Chevron Chemical Company LLC, Radnor Chemical Corporation, StyroChem U.S., Ltd. and
StyroChem Canada, Ltd. (Incorporated by reference to Exhibit No. 10.6 filed with the Form 10-K for the year ended December 25, 1998 filed by Radnor Holdings Corporation)**10.3

Second Amendment to Styrene Monomer Contract of Sale, dated as of January 1, 2001, among Chevron Phillips Chemical Company LP, Radnor Chemical Corporation, StyroChem U.S., Ltd.,
StyroChem Canada, Ltd. and WinCup Holdings, Inc. (Incorporated by reference to Exhibit No. 10.1 filed with the Form 10-Q for the quarterly period ended March 30, 2001 filed by Radnor Holdings Corporation)10.4

Amended Lease between Patricia M. Dunnell and James River Paper Company, Inc., dated September 29, 1989, as amended in September, 1994, assigned to WinCup Holdings, Inc. (as
successor in interest to WinCup Holdings, L.P.) on January 20, 1996 (Incorporated by reference to Exhibit No. 10.26 filed with Amendment No. 1 to the Original S-4)10.5

Warehouse Lease between Etzioni Partners and James River Corporation, dated February 13, 1992, as amended on April 13, 1992 and on December 9, 1992, assigned to WinCup Holdings,
Inc. (as successor in interest to WinCup Holdings, L.P.) on January 20, 1996 (Incorporated by reference to Exhibit No. 10.27 filed with Amendment No. 1 to the Original S-4)10.6

Lease between Stone Mountain Industrial Park, Inc. and Scott Container Group, Inc., dated December 16, 1991, as amended on February 28, 1994, assigned to WinCup Holdings on
January 20, 1996 (Incorporated by reference to Exhibit No. 10.30 filed with Amendment No. 1 to the Original S-4)10.7

Plant Lease 195 Tamal Vista Boulevard, Corte Madera, California, between Hunt Brothers Leasing, L.L.C. and WinCup Holdings, Inc. (as successor in interest to WinCup Holdings,
L.P.), dated May 1, 1997 (Incorporated by reference to Exhibit 10.70 filed with the Series B S-4)10.8

Engineering Lease 201 Tamal Vista Boulevard, Corte Madera, California, between Hunt Brothers Leasing, L.L.C. and WinCup Holdings, Inc. (as successor in interest to WinCup
Holdings, L.P.), dated May 1, 1997 (Incorporated by reference to Exhibit 10.71 filed with the Series B S-4)10.9

Warehouse Lease 205 Tamal Vista Boulevard, Corte Madera, California, between Hunt Brothers Leasing, L.L.C. and WinCup Holdings, Inc. (as successor in interest to WinCup Holdings,
L.P.), dated May 1, 1997 (Incorporated by reference to Exhibit 10.72 filed with the Series B S-4)10.10

Standard Form Multi-Tenancy Industrial Lease between WinCup Holdings, Inc. and CK Airpark Associates, dated June 1, 1994, assigned to WinCup Holdings, Inc. (as successor in
interest to WinCup Holdings, L.P.) on January 20, 1996 (Incorporated by reference to Exhibit No. 10.32 filed with Amendment No. 1 to the Original S-4)10.11

Industrial Building Lease between Centerpoint Properties Corporation and WinCup Holdings, Inc. (as successor in interest to WinCup Holdings, L.P.) dated May 1996 (Incorporated by
reference to Exhibit 10.33 filed with the Series B S-4)10.12

Radnor Corporate Center Office Lease by and between Radnor Center Associates and WinCup Holdings, Inc. (as successor in interest to WinCup Holdings, L.P.), dated May 31, 1996
(Incorporated by reference to Exhibit No. 10.34 filed with Amendment No. 1 to the Original S-4)***10.13

Executive Employment Agreement by and between Radnor Holdings Corporation and Richard Hunsinger, dated May 1, 1993, as amended in October, 1995 (Incorporated by reference to
Exhibit No. 10.38 filed with the Original S-4)***10.14

Radnor Holdings Corporation Equity Incentive Plan, dated April 24, 1992, as amended on November 1, 1993 (Incorporated by reference to Exhibit No. 10.39 filed with Amendment No. 1
to the Original S-4)






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***10.15

Radnor Holdings Corporation Management Equity Participation Plan, dated March 10, 1993, as amended on November 1, 1993 (Incorporated by reference to Exhibit No. 10.40 filed with
Amendment No. 1 to the Original S-4)10.16

Fourth Amended and Restated Revolving Credit and Security Agreement dated as of December 26, 2001, among Radnor Holdings Corporation, WinCup Holdings, Inc., Radnor Chemical
Corporation, StyroChem U.S., Ltd., Radnor Delaware, Inc., StyroChem Delaware, Inc., WinCup Texas, Ltd., StyroChem GP, L.L.C., StyroChem LP, L.L.C., WinCup GP, L.L.C., WinCup LP, L.L.C. and PNC Bank, National Association (Incorporated by reference to
Exhibit 10.19 filed with the 2001 10-K)10.17

First Amendment to Fourth Amended and Restated Revolving Credit and Security Agreement dated as of February 4, 2002, among Radnor Holdings Corporation, WinCup Holdings,
Inc., Radnor Chemical Corporation, StyroChem U.S., Ltd., Radnor Delaware II, Inc., StyroChem Delaware, Inc., WinCup Texas, Ltd., StyroChem GP, L.L.C., StyroChem LP, L.L.C., WinCup GP, L.L.C., WinCup LP, L.L.C. and PNC Bank, National Association
(Incorporated by reference to Exhibit 10.20 filed with the 2001 10-K)10.18

Letter of clarification dated March 21, 2002 among Radnor Holdings Corporation, WinCup Holdings, Inc., Radnor Chemical Corporation, StyroChem U.S., Ltd., Radnor Delaware II, Inc.,
StyroChem Delaware, Inc., WinCup Texas, Ltd., StyroChem GP, L.L.C., StyroChem LP, L.L.C., WinCup GP, L.L.C., WinCup LP, L.L.C. and PNC Bank, National Association (Incorporated by reference to Exhibit 10.18 filed with the Form 10-K for the year ended
December 27, 2002 filed by Radnor Holdings Corporation (the 2002 10-K))10.19

Amended, Restated and Consolidated Revolving Credit Note dated December 26, 2001, made by Radnor Holdings Corporation, WinCup Holdings, Inc., Radnor Chemical Corporation,
StyroChem U.S., Ltd., Radnor Delaware, Inc., WinCup Texas, Ltd., StyroChem Delaware, Inc., StyroChem GP, L.L.C., StyroChem LP, L.L.C., WinCup GP, L.L.C., and WinCup LP, L.L.C. in favor of PNC Bank, National Association (Incorporated by reference to
Exhibit 10.21 filed with the 2001 10-K)10.20

Amended and Restated Revolving Credit Note dated February 4, 2002, made by Radnor Holdings Corporation, WinCup Holdings, Inc., Radnor Chemical Corporation, StyroChem U.S., Ltd.,
Radnor Delaware II, Inc., WinCup Texas, Ltd., StyroChem Delaware, Inc., StyroChem GP, L.L.C., StyroChem LP, L.L.C., WinCup GP, L.L.C., and WinCup LP, L.L.C. in favor of PNC Bank, National Association (Incorporated by reference to Exhibit 10.22 filed
with the 2001 10-K)10.21

Amended and Restated Revolving Credit Note dated February 4, 2002, made by Radnor Holdings Corporation, WinCup Holdings, Inc., Radnor Chemical Corporation, StyroChem U.S., Ltd.,
Radnor Delaware II, Inc., WinCup Texas, Ltd., StyroChem Delaware, Inc., StyroChem GP, L.L.C., StyroChem LP, L.L.C., WinCup GP, L.L.C., and WinCup LP, L.L.C. in favor of PNC Bank, National Association (Incorporated by reference to Exhibit 10.23 filed
with the 2001 10-K)10.22

Trademark Collateral Security Agreement, dated December 5, 1996, between StyroChem U.S., Ltd. and The Bank of New York Commercial Corporation (Incorporated by reference to Exhibit
No. 10.44 filed with Amendment No. 1 to the Original S-4)10.23

Trademark Assignment of Security, dated December 5, 1996, between StyroChem U.S., Ltd. and The Bank of New York Commercial Corporation (Incorporated by reference to Exhibit No.
10.45 filed with Amendment No. 1 to the Original S-4)10.24

Trademark Collateral Security Agreement, dated December 5, 1996, between WinCup Holdings, Inc. and The Bank of New York Commercial Corporation (Incorporated by reference to
Exhibit No. 10.46 filed with Amendment No. 1 to the Original S-4)10.25

Trademark Assignment of Security, dated December 5, 1996, between WinCup Holdings, Inc. and The Bank of New York Commercial Corporation (Incorporated by reference to Exhibit No.
10.47 filed with Amendment No. 1 to the Original S-4)10.26

Trademark Security Agreement, dated December 26, 2001, between Radnor Delaware, Inc. and PNC Bank, National Association (Incorporated by reference to Exhibit 10.28 filed with the
2001 10-K)




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##### Table of Contents

10.27

Patent Security Agreement, dated December 26, 2001, between StyroChem Delaware, Inc., and PNC Bank, National Association (Incorporated by reference to Exhibit 10.29 filed with the
2001 10-K)10.28

Patent Security Agreement, dated December 26, 2001, between Radnor Delaware, Inc., and PNC Bank, National Association (Incorporated by reference to Exhibit 10.30 filed with the
2001 10-K)10.29

Copyright Security Agreement, dated December 26, 2001, between Radnor Delaware, Inc., and PNC Bank, National Association (Incorporated by reference to Exhibit 10.31 filed with the
2001 10-K)10.30

Assignment Agreement dated as of December 26, 2001, among Bank of America, N.A., First Union National Bank and PNC Bank, National Association (Incorporated by reference to Exhibit
10.32 filed with the 2001 10-K)10.31

Amended and Restated Guaranty dated as of December 26, 2001, by Radnor Management Delaware, Inc. in favor of PNC Bank, National Association (Incorporated by reference to Exhibit
10.33 filed with the 2001 10-K)10.32

Amended and Restated Guaranty dated as of December 26, 2001, by WinCup Europe Delaware, Inc. in favor of PNC Bank, National Association (Incorporated by reference to Exhibit 10.34
filed with the 2001 10-K)10.33

Joinder dated January 24, 2002 joining Radnor Delaware II, Inc. to the Fourth Amended and Restated Revolving Credit and Security Agreement (Incorporated by reference to Exhibit
10.35 filed with the 2001 10-K)10.34

Commitment Transfer Supplement, dated as of February 4, 2002, among PNC Bank, National Association, Fleet Capital Corporation, and PNC Bank, National Association, as agent for
Lenders under the Fourth Amended and Restated Revolving Credit and Security Agreement. (Incorporated by reference to Exhibit 10.36 filed with the 2001 10-K)10.35

Agreement Respecting a Term Loan and Other Credit Facilities, dated February 25, 1994, between Bank of Montreal and StyroChem Canada, Ltd., as amended (Incorporated by reference
to Exhibit No. 10.63 filed with Amendment No. 1 to the Original S-4)10.36

Letter of Undertaking, dated December 5, 1996, made by StyroChem Canada, Ltd. and Radnor Holdings Corporation in favor of Bank of Montreal (Incorporated by reference to Exhibit
No. 10.64 filed with the Original S-4)10.37

Guaranty, dated February 25, 1994, made by Radnor Chemical Corporation in favor of Bank of Montreal (Incorporated by reference to Exhibit No. 10.65 filed with Amendment No. 1 to
the Original S-4)***10.38

Employment Agreement, dated April 5, 1996, between WinCup Holdings, Inc. and R. Radcliffe Hastings (Incorporated by reference to Exhibit No. 10.66 filed with the Original
S-4)10.39

Neste Service Agreement by and between Neste Oy and StyroChem Finland Oy and Radnor Holdings Corporation dated as of October 15, 1997 (Incorporated by reference to Exhibit 10.68
filed with the Series B S-4)10.40

Land Lease Agreement by and between Neste Oy and StyroChem Finland Oy and Radnor Holdings Corporation dated as of October 15, 1997 (Incorporated by reference to Exhibit 10.69
filed with the Series B S-4)10.41

Lease and Cooperation Agreement between Suomen Polystyreeni Tehdas Oy/Finska Polystyren Fabriken Ab and Borough of Kokemaki dated February 27, 1971, as amended by Subcontract
dated October 13, 1976, Subcontract II dated February 26, 1981, Subcontract III dated August 13, 1985, Transfer of Lease Agreement between City of Kokemaki and Neste Oy dated December 29, 1987, Lease dated April 15, 1994 and Lease Agreement II dated
September 26, 1996 (Incorporated by reference to Exhibit 10.75 filed with the Series B S-4)


|
|



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##### Table of Contents

10.42

Office Lease Agreement between Keharakenpajat Oy and Neste Oy Polystyreeni dated July 1, 1995 (Incorporated by reference to Exhibit 10.77 filed with Amendment No. 1 to the Series
B S-4)***10.43

Employment Agreement dated February 21, 1997 between Radnor Holdings Corporation and Caroline J. Williamson (Incorporated by reference to Exhibit 10.81 filed with Amendment No. 1
to the Series B S-4)***10.44

Amendment to the Radnor Holdings Corporation Equity Incentive Plan, dated April 28,1992 (Incorporated by reference to Exhibit No. 10.67 filed with the Form 10-Q for the quarterly
period ended June 27,1997 filed by Radnor Holdings Corporation)***10.45

Radnor Holdings Corporation Senior Executive Retirement Plan, amended as of September 1, 1999 (Incorporated by reference to Exhibit 10.55 filed with Form 10-K for the year ended
December 31, 1999 filed by Radnor Holdings Corporation)***10.46

Letter Agreement dated as of December 10, 1998 between Radnor Holdings Corporation and Van D. Groenewold (Incorporated by reference to Exhibit No. 10.52 filed with the Form 10-K
for the year ended December 25, 1998 filed by Radnor Holdings Corporation)+10.47

Agreement of Sale dated as of January 1, 1998 by and between Lyondell Chemie Nederland, B.V., as assignee of Lyondell Chemical Nederland, Ltd. (formerly known as ARCO Chemie
Nederland, Ltd.) and StyroChem Finland Oy (Incorporated by reference to Exhibit 10.49 filed with the Form 10-K for the Year Ended December 25, 1998 filed by Radnor Holdings Corporation)++10.48

Amendment dated November 8, 2002 by and between Lyondell Chemie Nederland, B.V. and StyroChem Finland Oy (Incorporated by reference to Exhibit 10.48 filed with Amendment No. 1 to
the 2002 10-K)21.1

List of Subsidiaries of the Registrant (Incorporated by reference to Exhibit 21.1 filed with the 2002 10-K)31.1

Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 200231.2

Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 200232.1

Certification of Chief Executive Officer pursuant to Section 1350 of Title 18 of the United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
200232.2

Certification of Chief Financial Officer pursuant to Section 1350 of Title 18 of the United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002*

Portions of this Exhibit have been deleted pursuant to an Order Granting the Companys Application under Securities Act and Rule 406 Promulgated Thereunder for Confidential
Treatment.**

Portions of this Exhibit have been deleted pursuant to an Order Granting the Companys Application under Exchange Act and Rule 24b-2 Promulgated Thereunder for Confidential
Treatment.***

This exhibit represents a management contract or compensatory plan or arrangement.+

Portions of this Exhibit have been deleted pursuant to the Companys Application Requesting Extension of Previous Grant of Confidential Treatment under Exchange Act and Rule
24b-2 Promulgated Thereunder.++

Portions of this Exhibit have been deleted pursuant to the Companys Application under Exchange Act and Rule 24b-2 Promulgated Thereunder for Confidential
Treatment.




|(b) | Reports on Form 8-K
|--- | -------------------



No Current Reports on Form 8-K were filed during the last quarter of the period covered by this report.





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SIGNATURES



Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.



RADNOR
HOLDINGS CORPORATION



|Date: October 16, 2003 |  |     |  |                                                                     
|---------------------- |  | --- |  | --------------------------------------------------------------------
|                       |  |    
|                       |  | By: |  | /s/ MICHAEL T. KENNEDY                                              
|                       |  |     | 
|                       |  |     |  | Michael T. Kennedy Chairman of the Board and Chief Executive Officer



Pursuant to the
requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the Registrant in the capacities and on the dates indicated.



|    |  |                                            | 
|--- |  | ------------------------------------------ | 
|/s/ |  | MICHAEL T. KENNEDYMichael T. Kennedy       | 
|    |  |                                            | 
|/s/ |  | R. RADCLIFFE HASTINGSR. Radcliffe Hastings | 
|    |  |                                            | 
|/s/ |  | MICHAEL V. VALENZAMichael V. Valenza       | 
|    |  |                                            | 
|/s/ |  | JOHN P. MCNIFFJohn P. McNiff               | 
|    |  |                                            | 
|/s/ |  | PAUL M. FINIGANPaul M. Finigan             | 



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##### Table of Contents

Supplemental Information to be Furnished With Reports Filed Pursuant to Section 15(d) of the Act by Registrants Which
Have Not Registered Securities Pursuant to Section 12 of the Act



Registrant has not sent and does not anticipate sending any annual report to its security holders other than a copy of this Form 10-K report. Registrant has not sent and does not anticipate sending any proxy statement, form of proxy or
other proxy solicitation material to more than ten of its security holders with respect to any annual or other meeting of security holders, as it has only three holders of voting securities. If any annual report other than this Form 10-K report is
hereafter furnished to Registrants security holders, or if any proxy statement, form of proxy or other proxy solicitation material is hereafter sent to more than ten of its security holders with respect to any annual or other meeting of
security holders, Registrant will furnish four copies thereof to the Securities and Exchange Commission when it is so sent.





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INDEPENDENT AUDITORS REPORT



The Board of
Directors and Stockholders

Radnor Holdings Corporation:



We have audited the accompanying consolidated balance sheet of Radnor Holdings Corporation and subsidiaries as of December 27, 2002, and the related consolidated
statements of operations, stockholders equity and cash flows for the fiscal year then ended. These consolidated financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audit. The fiscal 2001 and 2000 consolidated financial statements of Radnor Holdings Corporation and subsidiaries were audited by other auditors who have ceased operations. Those auditors expressed an
unqualified opinion on those consolidated financial statements, before the revision described in Note 2 to the consolidated financial statements, in their report dated March 13, 2002.



We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable
basis for our opinion.



In our opinion, the fiscal 2002 consolidated financial
statements referred to above present fairly, in all material respects, the consolidated financial position of Radnor Holdings Corporation and subsidiaries as of December 27, 2002, and the results of their operations and their cash flows for the
fiscal year then ended in conformity with accounting principles generally accepted in the United States of America.



As discussed above, the fiscal 2001 and fiscal 2000 consolidated financial statements of Radnor Holdings Corporation and subsidiaries, were audited by other auditors who
have ceased operations. As described in Note 2, these consolidated financial statements have been revised to reflect the Companys change in reporting of sales and marketing rebates. We audited the adjustments described in Note 2 that were
applied to revise the fiscal 2001 and fiscal 2000 consolidated financials statements. In our opinion, such adjustments are appropriate and have been properly applied. However, we were not engaged to audit, review or apply any procedures to the
fiscal 2001 and fiscal 2000 consolidated financial statements of Radnor Holdings Corporation and subsidiaries other than with respect to such adjustments and disclosures, and, accordingly, we do not express an opinion or any other form of assurance
on the fiscal 2001 and fiscal 2000 consolidated financial statements taken as a whole.



/s/ KPMG LLP



Philadelphia, Pennsylvania

March 11, 2003



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##### Table of Contents

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS



To
Radnor Holdings Corporation:



We have audited the accompanying consolidated
balance sheets of Radnor Holdings Corporation (a Delaware corporation) and subsidiaries as of December 28, 2001 and December 29, 2000, and the related consolidated statements of operations, stockholders equity and cash flows for each of the
three years in the period ended December 28, 2001. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audits.



We conducted our audits in accordance with auditing standards generally accepted in the
United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.



In our opinion, the
financial statements referred to above present fairly, in all material respects, the financial position of Radnor Holdings Corporation and subsidiaries as of December 28, 2001 and December 29, 2000, and the results of their operations and their cash
flows for each of the three years in the period ended December 28, 2001, in conformity with accounting principles generally accepted in the United States.



/s/ ARTHUR ANDERSEN LLP



Philadelphia, Pennsylvania

March 13, 2002



Above is a copy of the report previously issued by Arthur Andersen LLP in
connection with Radnor Holdings Corporations filing on Form 10-K for the year ended December 28, 2001. This audit report has not been reissued by Arthur Andersen LLP in connection with Radnor Holdings Corporations filing on Form 10-K for
the year ended December 27, 2002. In accordance with EITF 00-22, the Company has changed its reporting of sales and marketing rebates as discussed in Note 2.



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##### Table of Contents

RADNOR HOLDINGS CORPORATION AND SUBSIDIARIES

Consolidated Balance Sheets

December 27, 2002 and December 28, 2001

(In
thousands, except share amounts)



|                                                                                                 |  | 2002 |         |   | 2001 |  
|------------------------------------------------------------------------------------------------ |  | ---- | ------- | - | ---- | -
|Assets                                                                                           |  |      |         |   |      |  
|Current assets:                                                                                  |  |      |         |   |      |  
|Cash                                                                                             |  | $    | 4,059   |   |      | $
|Accounts receivable, net                                                                         |  |      | 36,165  |   |      |  
|Inventories, net                                                                                 |  |      | 37,715  |   |      |  
|Prepaid expenses and other                                                                       |  |      | 7,115   |   |      |  
|Deferred tax asset                                                                               |  |      | 1,838   |   |      |  
|                                                                                                 |  |      |         |   |      |  
|                                                                                                 |  |      | 86,892  |   |      |  
|                                                                                                 |  |      |         |   |      |  
|Property, plant, and equipment, at cost:                                                         |  |      |         |   |      |  
|Land                                                                                             |  |      | 6,956   |   |      |  
|Supplies and spare parts                                                                         |  |      | 4,282   |   |      |  
|Buildings and improvements                                                                       |  |      | 39,385  |   |      |  
|Machinery and equipment                                                                          |  |      | 198,794 |   |      |  
|                                                                                                 |  |      |         |   |      |  
|                                                                                                 |  |      | 249,417 |   |      |  
|Less accumulated depreciation                                                                    |  |      | (73,921 | ) |      |  
|                                                                                                 |  |      |         |   |      |  
|                                                                                                 |  |      | 175,496 |   |      |  
|Investments in unconsolidated affiliates                                                         |  |      | 14,735  |   |      |  
|Other assets                                                                                     |  |      | 7,009   |   |      |  
|                                                                                                 |  |      |         |   |      |  
|                                                                                                 |  | $    | 284,132 |   |      | $
|                                                                                                 |  |      |         |   |      |  
|Liabilities and Stockholders Equity                                                             |  |      |         |   |      |  
|Current liabilities:                                                                             |  |      |         |   |      |  
|Accounts payable                                                                                 |  | $    | 34,141  |   |      | $
|Accrued liabilities                                                                              |  |      | 15,154  |   |      |  
|Current portion of long-term debt                                                                |  |      | 6,548   |   |      |  
|Current portion of capitalized lease obligations                                                 |  |      | 1,141   |   |      |  
|                                                                                                 |  |      |         |   |      |  
|                                                                                                 |  |      | 56,984  |   |      |  
|                                                                                                 |  |      |         |   |      |  
|Long-term debt, net of current portion                                                           |  |      | 205,928 |   |      |  
|Capitalized lease obligations, net of current portion                                            |  |      | 1,597   |   |      |  
|Deferred tax liability                                                                           |  |      | 7,816   |   |      |  
|Other non-current liabilities                                                                    |  |      | 1,746   |   |      |  
|Commitments and contingencies (note 5)                                                           |  |      |        |   |      |  
|Stockholders equity:                                                                            |  |      |         |   |      |  
|Voting and nonvoting common stock. Authorized 22,700 shares; issued and outstanding 6,245 shares |  |      | 1       |   |      |  
|Additional paid-in capital                                                                       |  |      | 19,387  |   |      |  
|Retained earnings (deficit)                                                                      |  |      | (4,663  | ) |      |  
|Cumulative translation adjustment                                                                |  |      | (4,664  | ) |      |  
|                                                                                                 |  |      |         |   |      |  
|Total stockholders equity                                                                       |  |      | 10,061  |   |      |  
|                                                                                                 |  |      |         |   |      |  
|                                                                                                 |  | $    | 284,132 |   |      | $
|                                                                                                 |  |      |         |   |      |  



See accompanying notes
to consolidated financial statements.



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##### Table of Contents

RADNOR HOLDINGS CORPORATION AND SUBSIDIARIES

Consolidated Statements of Operations

Fiscal years ended December 27, 2002, December 28, 2001

and December 29, 2000

(In thousands)



|                                                              |  | 2002 |         |   | 2001 |   |         | 2000 | 
|------------------------------------------------------------- |  | ---- | ------- | - | ---- | - | ------- | ---- | 
|Net sales                                                     |  | $    | 323,182 |   |      | $ | 325,734 |      | 
|Cost of goods sold                                            |  |      | 243,501 |   |      |   | 250,719 |      | 
|                                                              |  |      |         |   |      |   |         |      | 
|Gross profit                                                  |  |      | 79,681  |   |      |   | 75,015  |      | 
|                                                              |  |      |         |   |      |   |         |      | 
|Operating expenses:                                           |  |      |         |   |      |   |         |      | 
|Distribution                                                  |  |      | 22,621  |   |      |   | 25,176  |      | 
|Selling, general and administrative                           |  |      | 33,124  |   |      |   | 32,464  |      | 
|Gain on sale of business                                      |  |      |        |   |      |   | (10,493 | )    | 
|                                                              |  |      |         |   |      |   |         |      | 
|                                                              |  |      | 55,745  |   |      |   | 47,147  |      | 
|                                                              |  |      |         |   |      |   |         |      | 
|Income from operations                                        |  |      | 23,936  |   |      |   | 27,868  |      | 
|                                                              |  |      |         |   |      |   |         |      | 
|Interest                                                      |  |      | 21,382  |   |      |   | 22,331  |      | 
|Income from unconsolidated affiliates                         |  |      | (6,165  | ) |      |   | (1,160  | )    | 
|Other, net                                                    |  |      | 1,146   |   |      |   | 2,657   |      | 
|                                                              |  |      |         |   |      |   |         |      | 
|                                                              |  |      | 16,363  |   |      |   | 23,828  |      | 
|                                                              |  |      |         |   |      |   |         |      | 
|Income (loss) before income taxes and discontinued operations |  |      | 7,573   |   |      |   | 4,040   |      | 
|Provision (benefit) for income taxes                          |  |      | 2,878   |   |      |   | 2,150   |      | 
|                                                              |  |      |         |   |      |   |         |      | 
|Income (loss) before discontinued operations                  |  |      | 4,695   |   |      |   | 1,890   |      | 
|Loss from discontinued operations, net of tax                 |  |      | 48      |   |      |   | 247     |      | 
|                                                              |  |      |         |   |      |   |         |      | 
|Net income (loss)                                             |  | $    | 4,647   |   |      | $ | 1,643   |      | 
|                                                              |  |      |         |   |      |   |         |      | 



See accompanying notes
to consolidated financial statements.



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##### Table of Contents

RADNOR HOLDINGS CORPORATION AND SUBSIDIARIES

Consolidated Statements of Stockholders Equity

Fiscal years ended December 27, 2002, December 28, 2001

and December 29, 2000

(In thousands, except share amounts)



|                           |  | Voting andnonvotingcommon stock |  | Additionalpaid-incapital |   | Retainedearnings/(deficit) |   |        | Cumulativetranslationadjustment |   |         | Total | 
|-------------------------- |  | ------------------------------- |  | ------------------------ | - | -------------------------- | - | ------ | ------------------------------- | - | ------- | ----- | 
|                           |  | Shares                          |  | Amount                   |   |                            |   |       
|                           |  |                                 |  |                          |   |                           
|Balance, December 31, 1999 |  | 6,245                           |  | $                        | 1 |                            | $ | 19,387 |                                 | $ | (5,297  | )     | 
|Comprehensive loss:        |  |                                 |  |                          |   |                            |   |        |                                 |   |         |       | 
|Net loss                   |  |                                |  |                          |  |                            |   |       |                                 |   | (5,656  | )     | 
|Translation adjustment     |  |                                |  |                          |  |                            |   |       |                                 |   |        |       | 
|                           |  |                                 |  |                          |   |                            |   |        |                                 |   |         |       | 
|Total comprehensive loss   |  |                                 |  |                          |   |                            |   |        |                                 |   |         |       | 
|                           |  |                                 |  |                          |   |                            |   |        |                                 |   |         |       | 
|                           |  |                                 |  |                          |   |                           
|Balance, December 29, 2000 |  | 6,245                           |  |                          | 1 |                            |   | 19,387 |                                 |   | (10,953 | )     | 
|Comprehensive income:      |  |                                 |  |                          |   |                            |   |        |                                 |   |         |       | 
|Net income                 |  |                                |  |                          |  |                            |   |       |                                 |   | 1,643   |       | 
|Translation adjustment     |  |                                |  |                          |  |                            |   |       |                                 |   |        |       | 
|                           |  |                                 |  |                          |   |                            |   |        |                                 |   |         |       | 
|Total comprehensive income |  |                                 |  |                          |   |                            |   |        |                                 |   |         |       | 
|                           |  |                                 |  |                          |   |                            |   |        |                                 |   |         |       | 
|                           |  |                                 |  |                          |   |                           
|Balance, December 28, 2001 |  | 6,245                           |  |                          | 1 |                            |   | 19,387 |                                 |   | (9,310  | )     | 
|Comprehensive income:      |  |                                 |  |                          |   |                            |   |        |                                 |   |         |       | 
|Net income                 |  |                                |  |                          |  |                            |   |       |                                 |   | 4,647   |       | 
|Translation adjustment     |  |                                |  |                          |  |                            |   |       |                                 |   |        |       | 
|                           |  |                                 |  |                          |   |                            |   |        |                                 |   |         |       | 
|Total comprehensive income |  |                                 |  |                          |   |                            |   |        |                                 |   |         |       | 
|                           |  |                                 |  |                          |   |                            |   |        |                                 |   |         |       | 
|Balance, December 27, 2002 |  | 6,245                           |  | $                        | 1 |                            | $ | 19,387 |                                 | $ | (4,663  | )     | 
|                           |  |                                 |  |                          |   |                            |   |        |                                 |   |         |       | 



See accompanying notes
to consolidated financial statements.





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##### Table of Contents

RADNOR HOLDINGS CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows

Fiscal years ended December 27, 2002, December 28, 2001

and December 29, 2000

(In thousands)



|                                                                                                   |  | 2002 |         |   | 2001 |   |         | 2000 | 
|-------------------------------------------------------------------------------------------------- |  | ---- | ------- | - | ---- | - | ------- | ---- | 
|Cash flows from operating activities:                                                              |  |      |         |   |      |   |         |      | 
|Net income (loss)                                                                                  |  | $    | 4,647   |   |      | $ | 1,643   |      | 
|Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |  |      |         |   |      |   |         |      | 
|Depreciation and amortization                                                                      |  |      | 19,010  |   |      |   | 19,321  |      | 
|Gain on sale of business                                                                           |  |      |        |   |      |   | (10,493 | )    | 
|Deferred income taxes                                                                              |  |      | 2,233   |   |      |   | 1,703   |      | 
|Income from unconsolidated affiliates                                                              |  |      | (6,165  | ) |      |   | (1,160  | )    | 
|Discontinued operations                                                                            |  |      | 48      |   |      |   | 247     |      | 
|Changes in operating assets and liabilities, net of effects of disposition of business             |  |      |         |   |      |   |         |      | 
|Accounts receivable, net                                                                           |  |      | (761    | ) |      |   | (1,882  | )    | 
|Inventories, net                                                                                   |  |      | (5,817  | ) |      |   | 4,150   |      | 
|Prepaid expenses and other                                                                         |  |      | (440    | ) |      |   | 1,623   |      | 
|Accounts payable                                                                                   |  |      | (825    | ) |      |   | (14,924 | )    | 
|Accrued liabilities                                                                                |  |      | (3,839  | ) |      |   | (2,058  | )    | 
|                                                                                                   |  |      |         |   |      |   |         |      | 
|Net cash provided by (used in) continuing operations                                               |  |      | 8,091   |   |      |   | (1,830  | )    | 
|Net cash used in discontinued operations                                                           |  |      | (130    | ) |      |   | (67     | )    | 
|                                                                                                   |  |      |         |   |      |   |         |      | 
|Net cash provided by (used in) operating activities                                                |  |      | 7,961   |   |      |   | (1,897  | )    | 
|                                                                                                   |  |      |         |   |      |   |         |      | 
|Cash flows from investing activities:                                                              |  |      |         |   |      |   |         |      | 
|Capital expenditures                                                                               |  |      | (10,558 | ) |      |   | (12,358 | )    | 
|Net cash proceeds from sale of business                                                            |  |      |        |   |      |   | 30,935  |      | 
|Distributions from unconsolidated affiliates                                                       |  |      | 6,767   |   |      |   | 380     |      | 
|Investments in unconsolidated affiliates                                                           |  |      | (4,939  | ) |      |   | (747    | )    | 
|Increase in other assets                                                                           |  |      | (1,364  | ) |      |   | (1,478  | )    | 
|                                                                                                   |  |      |         |   |      |   |         |      | 
|Net cash provided by (used in) investing activities                                                |  | $    | (10,094 | ) |      | $ | 16,732  |      | 
|                                                                                                   |  |      |         |   |      |   |         |      | 



(Continued)



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##### Table of Contents

RADNOR HOLDINGS CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows

Fiscal years ended December 27, 2002, December 28, 2001

and December 29, 2000

(In thousands)



|                                                                                             |  | 2002 |        |   | 2001 |   |         | 2000 | 
|-------------------------------------------------------------------------------------------- |  | ---- | ------ | - | ---- | - | ------- | ---- | 
|Cash flows from financing activities:                                                        |  |      |        |   |      |   |         |      | 
|Net (repayments) borrowings on revolving credit lines and unsecured notes payable            |  | $    | 6,664  |   |      | $ | (16,609 | )    | 
|Borrowings on term debt and mortgage notes                                                   |  |      |       |   |      |   | 7,158   |      | 
|Payments on term debt and mortgage notes                                                     |  |      | (3,601 | ) |      |   | (3,454  | )    | 
|Payments on capitalized lease obligations                                                    |  |      | (759   | ) |      |   | (1,147  | )    | 
|                                                                                             |  |      |        |   |      |   |         |      | 
|Net cash provided by (used in) financing activities                                          |  |      | 2,304  |   |      |   | (14,052 | )    | 
|                                                                                             |  |      |        |   |      |   |         |      | 
|Effect of exchange rate changes on cash                                                      |  |      | (416   | ) |      |   | (205    | )    | 
|                                                                                             |  |      |        |   |      |   |         |      | 
|Net increase (decrease) in cash                                                              |  |      | (245   | ) |      |   | 578     |      | 
|Cash, beginning of period                                                                    |  |      | 4,304  |   |      |   | 3,726   |      | 
|                                                                                             |  |      |        |   |      |   |         |      | 
|Cash, end of period                                                                          |  | $    | 4,059  |   |      | $ | 4,304   |      | 
|                                                                                             |  |      |        |   |      |   |         |      | 
|Supplemental disclosure of cash flow information:                                            |  |      |        |   |      |   |         |      | 
|Cash paid during the period for interest                                                     |  | $    | 19,163 |   |      | $ | 21,031  |      | 
|                                                                                             |  |      |        |   |      |   |         |      | 
|Cash paid during the period for income taxes, net of refunds of $17 in 2001 and $168 in 2000 |  | $    | 648    |   |      | $ | 123     |      | 
|                                                                                             |  |      |        |   |      |   |         |      | 



See accompanying notes
to consolidated financial statements.



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##### Table of Contents

RADNOR HOLDINGS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



|1. | ORGANIZATION, SALE OF BUSINESS AND DISCONTINUED OPERATIONS
|-- | ----------------------------------------------------------



The Company



Radnor Holdings Corporation (Radnor) was incorporated in Delaware on November 6, 1991 to acquire the outstanding stock of Benchmark Holdings,
Inc. (Benchmark) and WinCup Holdings, Inc. (WinCup). Radnor, through its WinCup subsidiary, is the second largest producer in the United States of foam cups and containers for the foodservice industry. Through its Radnor
Chemical Corporation subsidiary, Radnor is the fifth largest worldwide producer of expandable polystyrene (EPS). Radnor and its subsidiaries (collectively the Company) sell their products primarily to national, institutional,
retail, and wholesale customers throughout the U.S., Canada, Mexico, and Europe. The Company markets its products under a variety of brand and trade names, including WinCup®, Handi-Kup®, and StyroChem®.



The Company has a number of large national accounts and supplies products to a number of large foodservice distributors. The five largest accounts
represented approximately 28% and 25% of the Companys net sales for each of the fiscal years 2002 and 2001 respectively. Although the Company has not lost sales from its key customers in fiscal years 2002 and 2001, if any of such customers
substantially reduces its level of purchases from the Company, the Companys profitability could be adversely affected. Moreover, continued consolidation among distributors in the foodservice industry could result in an increasingly
concentrated customer base or the loss of certain customers.



Sale of ThermiSol Business



On December 12,
2001 the Company completed the sale of its ThermiSol operations, which included seven manufacturing plants that convert EPS into insulation products for sale primarily to the Nordic construction industry, to CRH Europe B.V. and CRH Denmark A/S
(collectively CRH). In accordance with the stock purchase agreement dated November 16, 2001, CRH purchased all of the stock of ThermiSol Finland Oy, ThermiSol Sweden AB and ThermiSol Denmark A/S from Radnor. In connection with the sale
transaction, Radnor and its affiliates agreed not to engage in certain activities that would compete with the Business for a period of two years following the closing (the Competition Covenant).



The consideration for the sale of the business and the Competition Covenant
was $34.4 million in cash, and the assumption of net third party debt of $0.7 million. In connection with the sale of the business, Radnor realized a $10.5 million gain.



Discontinued Operations



Pursuant to an asset purchase agreement among Benchmark Holdings, Inc. (Benchmark), WinCup Holdings, Inc. (WinCup) and the Fort
James Corporation, formerly James River Paper Company, Inc. (Fort James), dated October 31, 1995. Benchmark and WinCup sold to Fort James all of the assets of Benchmarks cutlery and straws business and all of the assets of
WinCups thermoformed cup business, except for cash, accounts receivable, and prepaid assets. The operations of Benchmarks cutlery and straws business and WinCups thermoformed cup business were accounted for as discontinued
operations. The loss in fiscal 2002, 2001 and 2000, net of tax benefits of $32,000, $165,000 and $96,000, respectively, represents the settlement of a contingent liability related to the discontinued operations. The Company has no further exposure
to this contingent liability.



|2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|-- | ------------------------------------------



Fiscal Year



The Companys fiscal year is the fifty-two or fifty-three week period that ends on the last Friday of December of each year. The fiscal years ended
December 27, 2002, December 28, 2001 and December 29, 2000 were fifty-two week periods.



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##### Table of Contents

Principles of Consolidation



The accompanying consolidated financial statements include the accounts of Radnor and all of its majority owned
subsidiaries. All material intercompany balances and transactions have been eliminated in consolidation. The equity method of accounting is used when the Company has a 20% to 50% ownership interest in other companies. Certain reclassifications have
been made to the prior years presentations to conform to the current years presentation.



Equity Method of Accounting



Under the equity method, original investments are recorded at cost in other assets and adjusted for the Companys share of undistributed earnings or
losses of these companies. The Company owns a 20% limited partner investment in Radnor Investments, L.P. (the Partnership). The Partnership values substantially all of its investments, which are generally subject to restrictions on
resale and generally have no established market, at fair value, as determined in good faith by its general partner in accordance with the Partnerships valuation policy. The Partnership determines fair value to be the amount for which an
investment could be exchanged in an orderly disposition over a reasonable period of time between willing parties other than in a forced or liquidation sale. The Partnerships valuation policy considers the fact that no ready market exists for
substantially all of the entities in which it invests. The Partnerships valuation policy is intended to provide a consistent basis for determining the fair value of the portfolio. The Partnership will record unrealized depreciation on
investments when it believes that an investment has become impaired, including where collection of a loan or when the enterprise value of the company does not currently support the cost of the Partnerships investments. Conversely, the
Partnership will record unrealized appreciation if it believes that the underlying portfolio company has appreciated in value and, therefore, the Partnerships investment has also appreciated in value. Because of the inherent uncertainty of
such valuation, estimated values may differ significantly from the values that would have been used had a ready market for these investments existed and/or the Partnership liquidated its position and the differences could be material.



The Partnerships primary investment is a 55.6% ownership in a media
programming company whose major operation is a basic tier arts and entertainment channel. The fair value of this investment was determined on a discounted cash flow basis. The significant drivers of the fair value determination are the estimated
number of subscribers to the channel, the estimated level of advertising shown on the channel, reliance on the contract through which the channels content is distributed and the assessed likelihood of renewal of the contract. While the
estimates made by the Partnership with respect to these significant drivers taken as a whole remain valid, actual future results could differ from those estimates.



Accounts Receivable, Net



Accounts receivable are net of allowances for doubtful accounts of $205,000 and $538,000 at December 27, 2002 and December 28, 2001, respectively. Bad
debt expense was $294,000, $565,000 and $101,000 for fiscal years 2002, 2001 and 2000, respectively. The related write-offs of accounts receivable were $627,000, $463,000 and $97,000 for those years, respectively.



Inventories



Inventories are recorded at the lower of cost (first-in, first-out) or
market. Inventories at December 27, 2002 and December 28, 2001, consisted of the following (in thousands):



|                |  | 2002 |        | 2001
|--------------- |  | ---- | ------ | ----
|Raw materials   |  | $    | 8,378  |     
|Work-in process |  |      | 1,442  |     
|Finished goods  |  |      | 27,895 |     
|                |  |      |        |     
|                |  | $    | 37,715 |     
|                |  |      |        |     



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##### Table of Contents

Property, Plant, and Equipment



Property, plant, and equipment are stated at cost and depreciated using the straight-line method over estimated useful
lives, which range from 5 to 40 years. Leasehold improvements are amortized over the lesser of their estimated useful lives or the term of the lease using the straight-line method. Maintenance and repairs are charged to operations currently, and
replacements and significant improvements are capitalized. Depreciation expense in 2002, 2001 and 2000 was $14,122,000, $14,590,000 and $13,273,000, respectively.



Supplies and Spare Parts



Supplies and spare parts include maintenance parts maintained in central stores locations. When needed at the manufacturing facilities, parts are shipped
and expensed.



Other Assets



Other assets include deferred financing costs of $1.4 million and $2.9
million as of December 27, 2002 and December 28, 2001, respectively, related to the financing arrangements and note offerings executed in 1996 and 1997. Such costs are being amortized over the terms of the related debt instruments.
Amortization of deferred costs of $1,492,000, $1,498,000 and $1,499,000 was included in interest expense for the years ended December 27, 2002, December 28, 2001 and December 29, 2000, respectively.



Environmental Expenditures



Environmental expenditures that relate to an existing condition caused by
past operations and that do not contribute to current or future revenue generation are expensed. Liabilities are recorded when environmental assessments and/or cleanups are probable, and the costs can be reasonably estimated.



Income Taxes



The Company accounts for income taxes under the liability method. Under this
method, deferred tax assets and liabilities are recognized for the tax effects of temporary differences between the financial reporting and tax bases of assets and liabilities using enacted tax law and statutory tax rates applicable to the periods
in which the temporary differences are expected to affect taxable income.



Revenue Recognition



Revenue is recognized as risk of ownership and title to the product transfers to the customer, which occurs when goods are shipped.



In accordance with Emerging Issues Task Force Issue No. 00-22, the Company has changed its reporting of sales and marketing rebates to include them as an
offset to revenues. Previously they were included in selling, general and administrative expenses. The consolidated statements of operations of the prior periods have been adjusted to reflect this reclassification. The sales and marketing rebates
were $8.4 million, $6.6 million and $8.8 million in fiscal 2002, 2001 and 2000, respectively.



Currency Translation



The Company conducts business in a number of foreign countries and as a result is subject to the risk of fluctuations in foreign currency exchange rates and other political and economic risks associated with international business. The
Companys foreign entities report their assets, liabilities, and results of operations in the currency in which the entity primarily conducts its business. Foreign assets and liabilities are translated into U.S. dollars at the rates in effect
at the end of the fiscal period. The revenue and expense accounts of foreign subsidiaries are translated into U.S. dollars at the average rates that prevailed during the period. Adjustments resulting from the translation of the financial statements
are reflected as a currency translation adjustment in stockholders equity. Currency transaction gains and losses are not material.



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##### Table of Contents

Research and Development



Research and development costs are charged to expense as incurred and are included in cost of goods sold. These costs
represented 0.8%, 0.8% and 1.0% of net sales in 2002, 2001 and 2000, respectively.



Stock Option Accounting



The Company applies the intrinsic-value-based method of accounting prescribed by Accounting Principles Board (APB) Opinion No. 25, Accounting for Stock Issued to Employees, and related interpretations including FASB
Interpretation No. 44, Accounting for Certain Transactions involving Stock Compensation, an interpretation of APB Opinion No. 25, issued in March 2000, to account for its stock options. See Footnote 8 for additional information regarding
the Companys stock option plan.



Use of Estimates



The preparation of consolidated financial statements in
conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Judgments and estimates of uncertainties are required
in applying the Companys accounting policies in certain areas. Following are some of the areas requiring significant judgments and estimates: determination of an assets useful life; estimates of allowances for bad debts; cash flow and
valuation assumptions in performing asset impairment tests of long-lived assets; valuation assumption in determining the fair value of investments held by unconsolidated affiliates; and estimates of realizability of deferred tax assets.



Fair Value of Financial Instruments



The estimated fair value of financial instruments was determined by the
Company using market quotes, if available, or discounted cash flows using market interest rates. The carrying values of cash, accounts receivable, accounts payable and accrued liabilities approximate fair value due to the short-term nature of these
items. The carrying amounts of the Companys bank term loans and the lines of credit approximate fair value because they have variable interest rates based on either the prime rate or the interbank offering rate of the currency in which the
Company borrows. The fair value of the senior notes at December 27, 2002 approximate their carrying values.



Recently Issued Accounting Standards



In June 2001, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 143,
Accounting for Asset Retirement Obligations. SFAS No. 143 addresses financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs. The Company is
required to adopt the provisions of this pronouncement no later than the beginning of fiscal 2003. The Company does not believe this Statement will have an effect on the Companys financial statements.



In August 2001, the FASB issued SFAS No. 144, Accounting for the
Impairment or Disposal of Long-Lived Assets. SFAS No. 144 addresses financial accounting and reporting for the impairment or disposal of long-lived assets. The Company was required to adopt the provisions of this pronouncement in the beginning
of fiscal 2002. The adoption had no effect on the Companys financial statements.



In April 2002, the FASB issued SFAS No. 145, Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections. This Statement rescinds SFAS No. 4,
Reporting Gains and Losses from Extinguishment of Debt, and SFAS No. 64, Extinguishments of Debt Made to Satisfy Sinking-Fund Requirements. The Statement requires gains and losses from debt extinguishments that are



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##### Table of Contents

used as part of the Companys risk management strategy to be classified as income from operations rather than as extraordinary items, net of tax. The
Company adopted this Statement during the fourth quarter of its year ended December 27, 2002. The impact on the Company was to reclassify the extraordinary item recorded during the quarter ended March 29, 2002 to income from continuing operations.



In January 2003, the FASB issued Interpretation No. 46,
Consolidation of Variable Interest Entities an interpretation of ARB No. 51. This Interpretation clarifies the application of Accounting Research Bulletin No. 51, Consolidated Financial Statements, to certain entities in
which equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. The
Interpretation applies immediately to variable interest entities created after January 31, 2003, and to variable interest entities in which an enterprise obtains an interest after that date. It applies in the first fiscal year or interim period
beginning after December 15, 2003, to variable interest entities in which an entity holds a variable interest that it acquired prior to February 1, 2003. Based on the Companys most recent evaluation, the Company believes it will have to
consolidate the Partnership beginning with the Companys Quarterly Report on Form 10-Q for the quarter ended March 26, 2004. The Company expects this will cause an increase to the investment assets on its consolidated balance sheet with
minority interest being recorded for the 80% of the Partnership owned by the general partner of the Partnership. The Company does not anticipate that the adoption of FIN 46 will have any material effect on the consolidated net income or the cash
flow of the Company.



|3. | INVESTMENTS IN UNCONSOLIDATED AFFILIATES
|-- | ----------------------------------------



The Company accounts for investments in unconsolidated affiliates by the equity method of accounting as described in Note 2. The Companys
investments in unconsolidated affiliates totaled $14.7 million and $6.1 million at December 27, 2002 and December 28, 2001, respectively. The Companys investments include interests in private equity partnerships that invest in consumer,
industrial, technology and certain other companies as determined by the partnerships that will provide a return commensurate with their underlying risk. The most significant investment, totaling $13.3 million at December 27, 2002 and $4.7 million at
December 28, 2001, is Radnor Investments, L.P. Radnor Investments, L.P. is a Delaware limited partnership and was formed for the purpose of making investments generally in privately-held companies in a variety of industries. The Company
serves as the limited partner and owns 20% of Radnor Investments, L.P., with Radnor Investment Advisors, L.P. serving as the general partner. The general partner of Radnor Investment Advisors, L.P. is Radnor Investment Advisors, Inc., whose owners
consist of the chief executive officer and certain other stockholders of the Company. The Company has not had and does not have any material direct or indirect contractual relationships with either Radnor Investment Advisors, L.P. or its general
partner, Radnor Investment Advisors, Inc., including, without limitation, any loan, guarantee or other credit arrangements, any liability assignments or assumptions or any similar transactions. The Company invested $7.6 million, $0.7 million and
$1.2 million during the years ended December 27, 2002, December 28, 2001 and December 29, 2000, respectively, in Radnor Investments, L.P.



A summary of financial information for Radnor Investments, L.P. as of December 31, 2002 and 2001 and for each year in the three year period ended December
31, 2002 follows (in thousands):



|                  |  | December 31,
|----------------- |  | ------------
|                  |  | 2002        
|                  |  |             
|Total assets      |  | $           
|Total liabilities |  |             



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##### Table of Contents

|                                                                |  | Years Ended December 31, |       
|--------------------------------------------------------------- |  | ------------------------ | ------
|                                                                |  | 2002                     |       
|                                                                |  |                          |       
|Interest income                                                 |  | $                        | 65    
|                                                                |  |                          |       
|Net income (loss) before unrealized appreciation of investments |  |                          | (561  
|Net unrealized appreciation of investments                      |  |                          | 38,518
|                                                                |  |                          |       
|Net increase in partners capital from operations               |  | $                        | 37,957
|                                                                |  |                          |       



The net increase in
partners capital from operations resulted primarily from unrealized gains on investments for which there is no established market.



|4. | LONG-TERM DEBT
|-- | --------------



Long-term debt consists of the following (in thousands):



|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |  | 2002 |         |   | 2001 |  
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---- | ------- | - | ---- | -
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |  |     
|Series A and Series B Senior Notes bearing interest at 10.0%, interest payable semi-annually, due December 1, 2003, including a
premium of $386 and $806 at December 27, 2002 and at December 28, 2001, respectively.                                                                                                                                                                                                                                                                                                                                                        |  | $    | 159,886 |   |      | $
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |  |     
|Outstanding balance under the Fourth Amended and Restated Revolving Credit and Security Agreement (the Credit
Agreement), bearing interest at the Companys option at a rate based upon various formulae as defined within the agreement. At December 27, 2002, the interest rate was based upon LIBOR rates with various maturities (1.68%) plus 2.50% or
at U.S. prime (4.25%). The obligations of the Company under the Credit Agreement are secured by a lien on substantially all of the Companys U.S. subsidiaries inventory, receivables and general intangibles. |  |      | 29,652  |   |      |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |  |     
|Outstanding balance under the Canadian Revolving Credit Facility (borrowing capacity of $5.0 million Canadian including a letter
of credit subfacility and a Foreign Exchange Future Contracts subfacility), with Canadian dollar advances bearing interest at Canadian prime (4.50%) at December 27, 2002. There were no U.S dollar advances outstanding at December 27, 2002. Loans
under the Canadian Revolving Credit Facility are payable on demand and secured by substantially all of the assets of the Companys Canadian subsidiary.                                |  |      | 2,568   |   |      |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |  |     
|Outstanding balances under Canadian term loans, bearing interest at Canadian prime (4.50% at December 27, 2002) plus 1.0%, secured
by substantially all assets of the Companys Canadian subsidiary, payable in monthly or quarterly installments of principal plus interest, over a maximum of five to seven years.                                                                                                                                                                                                                                                         |  |      | 393     |   |      |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |  |     
|Outstanding balance under Canadian term loan, bearing interest at 6.05% at December 27, 2002, collateralized by a mortgage
agreement, payable in monthly installments of principal and interest of approximately $4,400 Canadian commencing January 2000 with final payment due December 2025.                                                                                                                                                                                                                                                                               |  |      | 411     |   |      |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |  |     
|Outstanding balances under capital expenditure loans bearing interest at various rates between 8.36% and 9.86%, payable in
quarterly principal; and interest installments, due between February 2005 and December 2006, secured by equipment purchased with the proceeds.                                                                                                                                                                                                                                                                                                    |  |      | 7,962   |   |      |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |  |     
|Outstanding balances under term loan facilities, bearing interest at the Companys option at a rate based upon various
formulae as defined in the agreements. At December 27, 2002, the rates were based upon LIBOR plus margin (3.83%) and a fixed rate (7.04%) The term loans are payable in monthly and quarterly principal installments plus interest with final payments
due September 2003 and June 2013. The term loans are secured by certain mortgage agreements.                                                                                                   |  |      | 9,320   |   |      |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |  |     
|Outstanding balances under term loan facility, bearing interest at 6 month EURIBOR (2.88% at December 27, 2002) plus margin (1.0%
at December 27, 2002) payable in quarterly principal installments plus interest with final payment due in March 2006.                                                                                                                                                                                                                                                                                                                      |  |      | 2,284   |   |      |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |  |      |         |   |      |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |  |     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |  |      | 212,476 |   |      |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |  |     
|Less current portion                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |  |      | (6,548  | ) |      |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |  |      |         |   |      |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |  |     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |  | $    | 205,928 |   |      | $
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |  |      |         |   |      |  



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---

##### Table of Contents

On March 11, 2003, the Company issued $135.0 million of 11.0% Senior Notes due 2010 and amended its
domestic revolving credit facility to include a $45.0 million term loan and to increase the revolving credit commitment from $35.0 million to $45.0 million. The proceeds were used to repay the existing $159.5 million Series A and Series B Senior
Notes and outstanding borrowings under the existing revolving credit facilities. Accordingly, the current portion of the notes has been classified as non-current.



On December 26, 2001, the Company and certain of its domestic subsidiaries as borrowers, entered into the Credit Agreement,
pursuant to which the Third Amended and Restated Revolving Credit and Security Agreement dated as of December 29, 1999 was amended and restated. The Credit Agreement decreased the credit facility from $50.0 million to $35.0 million and eliminated
the European sublimit. The Credit Agreement provides for a fee of 0.375% per annum on the undrawn amount of the credit facility, and letter of credit fees in the amount of 1.75% and 0.25% of the aggregate face amount of standby letters of credit and
documentary letters of credit, respectively. There is a $5.0 million sub limit on standby letters of credit and $1.0 million sub limit on documentary letters of credit. At each of the years ending December 27, 2002 and December 28, 2001, the Company
had outstanding $2.4 million and $1.8 million of standby letters of credit, respectively.



The debt issuance premium on the Series B Notes is being amortized over the life of the notes. For the years 2002, 2001 and 2000, premium amortization of $420,000, $390,000 and $344,000, respectively, has been
recorded as a reduction of interest expense.



Each of the above
agreements contain certain restrictive covenants which include, among other things, restrictions on the declaration or payment of dividends, the repurchase of stock, the incurrence of additional debt, the amount of capital expenditures and
additional investments and the sale or disposition of assets. The Company is also required to maintain a minimum net worth and certain financial ratios including debt to equity, current, debt coverage, and earnings to interest expense. The Company
is in compliance with all financial covenants.



F-14



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##### Table of Contents

Future debt maturities, excluding the debt premium, are as follows (in thousands):



|2003                |  | $ | 6,548  
|------------------- |  | - | -------
|2004                |  |   | 3,940  
|2005                |  |   | 3,573  
|2006                |  |   | 1,361  
|2007                |  |   | 583    
|2008 and thereafter |  |   | 196,085
|                    |  |   |        
|                    |  | $ | 212,090
|                    |  |   |        



|5. | COMMITMENTS AND CONTINGENCIES
|-- | -----------------------------



Leases



The Company leases certain of its manufacturing, warehouse and office facilities, and transportation equipment under noncancellable operating and capital
lease arrangements.



The future minimum payments under
noncancellable operating leases are as follows (in thousands):



|2003                |  | $ | 6,664 
|------------------- |  | - | ------
|2004                |  |   | 5,176 
|2005                |  |   | 3,539 
|2006                |  |   | 2,621 
|2007                |  |   | 2,016 
|2008 and thereafter |  |   | 4,468 
|                    |  |   |       
|                    |  | $ | 24,484
|                    |  |   |       



Rental expense for all
operating leases was $6,953,000, $7,492,000 and $7,447,000 for 2002, 2001 and 2000, respectively.



The future minimum payments under capital leases are as follows (in thousands):



|2003                                         |  | $ | 1,317
|-------------------------------------------- |  | - | -----
|2004                                         |  |   | 799  
|2005                                         |  |   | 654  
|2006                                         |  |   | 249  
|2007                                         |  |   | 40   
|                                             |  |   |      
|                                             | 
|Total minimum lease payments                 |  |   | 3,059
|                                             | 
|Less interest (at rates from 4.90% to 8.24%) |  |   | 321  
|                                             |  |   |      
|                                             | 
|Present value of net minimum lease payments  |  |   | 2,738
|                                             | 
|Less current maturities                      |  |   | 1,141
|                                             |  |   |      
|                                             | 
|Capital lease obligations                    |  | $ | 1,597
|                                             |  |   |      



Litigation



The Company is involved in various legal actions arising
in the normal course of business. After taking into consideration legal counsels evaluation of such actions, management believes that these actions will not have a material effect on the Companys financial position or results of
operations.





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##### Table of Contents

Supply Agreements



In January 2001, the Company amended its primary North American styrene monomer supply contract. The initial term of the
contract extends through December 2006. Under the amended contract, the Company is required to purchase 150 million pounds of its annual North American styrene monomer requirements from one supplier and has certain rights to purchase additional
styrene monomer.



In connection with the 1997 acquisition of
its European specialty chemicals operations, the Company negotiated a contract to provide a long-term supply of styrene monomer through December 2004 at a reduced price and with volume discounts to such operations.



|6. | STOCKHOLDERS EQUITY
|-- | --------------------



The Company is currently authorized to issue up to 11,650 shares of Voting Common Stock, 5,400 shares of Class B Nonvoting Common Stock, 5,650 shares of
Nonvoting Common Stock and 2,000 shares of series preferred stock. At December 27, 2002, there are issued and outstanding 600 shares of Voting Common Stock, 5,400 shares of Class B Nonvoting Common Stock and 245 shares of Nonvoting Common Stock. All
shares have a par value of $0.10 except for shares of Class B Nonvoting Common Stock, which have a par value of $0.01.



|7. | INCOME TAXES
|-- | ------------



The components of income (loss) before taxes by source of income are as follows (in thousands):



|              |  | 2002 |       | 2001 |   |       | 2000 | 
|------------- |  | ---- | ----- | ---- | - | ----- | ---- | 
|United States |  | $    | 3,363 |      | $ | 4,394 |      | 
|Non U.S.      |  |      | 4,210 |      |   | (354  | )    | 
|              |  |      |       |      |   |       |      | 
|              |  | $    | 7,573 |      | $ | 4,040 |      | 
|              |  |      |       |      |   |       |      | 



The provision
(benefit) for income taxes for each of the three years in the period ended December 27, 2002 is as follows (in thousands):



|                                                                                                                                                                |  | 2002 |       |   | 2001 |   |        | 2000 | 
|--------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---- | ----- | - | ---- | - | ------ | ---- | 
|Current:                                                                                                                                                        |  |      |       |   |      |   |        |      | 
|Federal                                                                                                                                                         |  | $    | (105  | ) |      | $ |       |      | 
|State                                                                                                                                                           |  |      | 82    |   |      |   | 25     |      | 
|Foreign                                                                                                                                                         |  |      | 668   |   |      |   | 422    |      | 
|Deferred                                                                                                                                                        |  |      | 951   |   |      |   | 5,405  |      | 
|Utilization (generation) of net operating loss carryforwards (excluding generation of net operating loss due to discontinued
operations in 2002, 2001 and 2000) |  |      | 1,234 |   |      |   | (3,907 | )    | 
|Valuation allowance                                                                                                                                             |  |      | 48    |   |      |   | 205    |      | 
|                                                                                                                                                                |  |      |       |   |      |   |        |      | 
|                                                                                                                                                                |  | $    | 2,878 |   |      | $ | 2,150  |      | 
|                                                                                                                                                                |  |      |       |   |      |   |        |      | 



F-16



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##### Table of Contents

The components of deferred taxes at December 27, 2002 and December 28, 2001 are as follows (in
thousands):



|                                                                             |  | 2002 |        |   | 2001 |  
|---------------------------------------------------------------------------- |  | ---- | ------ | - | ---- | -
|Deferred tax assets:                                                        
|Net operating loss carryforwards including loss from discontinued operations |  | $    | 25,859 |   |      | $
|Vacation pay and compensation accruals                                       |  |      | 493    |   |      |  
|Bad debt, inventory, and returns and allowances                              |  |      | 609    |   |      |  
|Other accruals                                                               |  |      | 571    |   |      |  
|Valuation allowance                                                          |  |      | (367   | ) |      |  
|                                                                             |  |      |        |   |      |  
|                                                                             |  |      | 27,165 |   |      |  
|                                                                             |  |      |        |   |      |  
|Deferred tax liabilities:                                                    |  |      |        |   |      |  
|Accelerated tax depreciation                                                 |  |      | 27,924 |   |      |  
|Gain on sale of business                                                     |  |      | 1,101  |   |      |  
|Other                                                                        |  |      | 4,118  |   |      |  
|                                                                             |  |      |        |   |      |  
|                                                                             |  |      | 33,143 |   |      |  
|                                                                             |  |      |        |   |      |  
|Net deferred tax liability                                                   |  | $    | 5,978  |   |      | $
|                                                                             |  |      |        |   |      |  



The provision
(benefit) for income taxes varies from the amount determined by applying the United States Federal statutory rate to pre-tax income as a result of the following (in thousands):



|                                           |  | 2002 |       |   | 2001 |   | 2000  | 
|------------------------------------------ |  | ---- | ----- | - | ---- | - | ----- | 
|United States federal statutory income tax |  | $    | 2,575 |   |      | $ | 1,366 | 
|State income taxes, net of federal benefit |  |      | 228   |   |      |   | 176   | 
|Nondeductible expenses                     |  |      | 133   |   |      |   | 108   | 
|Foreign tax rate differential              |  |      | (58   | ) |      |   | 463   | 
|Other                                      |  |      |      |   |      |   | 37    | 
|                                           |  |      |       |   |      |   |       | 
|                                           |  | $    | 2,878 |   |      | $ | 2,150 | 
|                                           |  |      |       |   |      |   |       | 



As of December 27,
2002, the Company had approximately $67.2 million of net operating loss carryforwards for federal income tax purposes, which expire through 2021.



|8. | STOCK OPTION PLAN
|-- | -----------------



The 1992 Equity Incentive Plan (the Plan) provides for the grant of nonqualified options to purchase shares of the Nonvoting Common Stock
subject to certain limitations. Nonqualified stock options are issuable only to eligible officers and employees of the Company. The Company has reserved 1,249 shares of its Nonvoting Common Stock for issuance under the Plan.



The per share exercise price of a stock option may not be less than 75% of
the fair market value of the Nonvoting Common Stock, as determined by the board of directors, on the date the option is granted. Such options may be exercised only if the option holder remains continuously associated with the Company from the date
of grant to a date not less than three months prior to the date of exercise. The exercise date of an option granted under the plan cannot be later than ten years from the date of the grant. Any options that expire unexercised or that terminate upon
an optionees ceasing to be employed by the Company become available once again for issuance.



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##### Table of Contents

The following summarizes the stock option activity under the Plan:



|                                            |  | 2002  |   |  | 2001  |   |  | 2000  |  
|------------------------------------------- |  | ----- | - |  | ----- | - |  | ----- | -
|Options outstanding at beginning of period: |  | 1,051 |   |  | 1,109 |   |  | 1,111 |  
|                                            |  |       |   |  |       |   |  |       |  
|Granted                                     |  |      |   |  |      |   |  |      |  
|Exercised                                   |  |      |   |  |      |   |  |      |  
|Canceled                                    |  | (315  | ) |  | (58   | ) |  | (2    | )
|                                            |  |       |   |  |       |   |  |       |  
|                                            |  |       |  
|Options outstanding at end of period        |  | 736   |   |  | 1,051 |   |  | 1,109 |  
|                                            |  |       |   |  |       |   |  |       |  
|                                            |  |       |  
|Options available for grant                 |  |      |   |  | 198   |   |  | 140   |  
|                                            |  |       |   |  |       |   |  |       |  
|                                            |  |       |  
|Exercisable at end of period                |  | 736   |   |  | 963   |   |  | 935   |  
|                                            |  |       |   |  |       |   |  |       |  



The Company applies
Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees, and related interpretations in accounting for its stock options plans. Accordingly, no compensation expense has been recognized related to the plans
described above. If compensation cost for these plans had been determined using the fair-value method prescribed by Statement of Financial Accounting Standards No. 123, Accounting for Stock Based Compensation, the Companys net income
would have been reduced to the pro forma amounts indicated below.



|                   |  | 2002           |       | 2001 |   | 2000  | 
|------------------ |  | -------------- | ----- | ---- | - | ----- | 
|                   |  | (In thousands) |      
|Net income (loss): |  |                |       |      |   |       | 
|As reported        |  | $              | 4,647 |      | $ | 1,643 | 
|Pro forma          |  |                | 4,480 |      |   | 1,357 | 



This pro forma impact
may not be representative of the effects for future years and is likely to increase as additional options are granted and amortized over the vesting period.



As the Companys stock is not publicly traded, the fair value of each option was estimated on the grant date using the minimum value method (which
excludes a volatility assumption), with the following assumptions: risk-free rate of interest  6.31%; expected life  10 years; and no dividends paid.



|9. | EMPLOYEE BENEFIT PLAN
|-- | ---------------------



The Company sponsors a 401(k) savings and profit sharing plan, which covers all employees who have at least 1,000 hours of service during the year. The
Company will match employee contributions up to 2.8% of an employees annual salary. The Company may also, at the discretion of the board of directors, elect to make a profit sharing contribution. There have been no profit sharing contributions
for the three years in the period ended December 27, 2002. Employer matching contributions to the plan amounted to $709,000, $700,000 and $729,000 for each of the three years in the period ended December 27, 2002, respectively.



Certain of the Companys European subsidiaries maintain defined
contribution benefit plans. Pension expense related to these plans was $1,299,000, $1,795,000 and $2,074,000 in 2002, 2001 and 2000, respectively.



|10. | RELATED PARTY TRANSACTIONS
|--- | --------------------------



A former director of the Company is a partner in the law firm which serves as the Companys primary legal counsel. During 2002, 2001 and 2000, the
Company paid fees of $472,000, $203,000 and $267,000, respectively, to this firm.



The Company provides certain management services and rights to a related company. For the management services and rights, the Company receives fees and royalties and is reimbursed for all expenses advanced on behalf
of the entity. During 2002, 2001 and 2000, the Company earned management fees, interest and royalties of $0.5, $1.1 million and $1.1 million, respectively. At December 27, 2002 and December 28, 2001, unpaid management fees, interest, royalties and
expense advances totaled $0.9 million and $4.6 million, respectively.



F-18



---

##### Table of Contents

The Company has made interest-bearing advances to Michael T. Kennedy, the Companys Chief Executive
Officer. As of December 27, 2002, outstanding principal and interest from these advances totaled $4.3 million.



|11. | SEGMENT INFORMATION
|--- | -------------------



The Company has two business segments that operate within three distinct geographic regions. The packaging and insulation segment produces food packaging
and insulation products for distribution to the foodservice, insulation, and packaging industries. The specialty chemicals segment produces EPS for internal consumption by the packaging and insulation segment in addition to selling to third-party
manufacturers. Each of these segments operates in the United States, Canada, and Europe. Financial results for the periods presented are not fully comparable because of the December 2001 disposition of the Companys European insulation
operations.



The following tables summarize the Companys
financial information and results of operations by segment and geographic region for fiscal years 2000 through 2002 (in thousands):



Operating:



|2002                                 |  | Packagingandinsulation |         | Specialtychemicals |   |         | Corporateand other |  |   | Eliminations |   |  | Consolidated
|------------------------------------ |  | ---------------------- | ------- | ------------------ | - | ------- | ------------------ |  | - | ------------ | - |  | ------------
|Sales to unaffiliated customers      |  | $                      | 195,328 |                    | $ | 124,508 |                    |  | $ | 3,346        |   |  | $           
|Transfers between operating segments |  |                        | 79      |                    |   | 9,804   |                    |  |   |             |   |  |             
|Income (loss) from operations        |  |                        | 29,707  |                    |   | 4,353   |                    |  |   | (10,124      | ) |  |             
|Identifiable assets                  |  |                        | 162,123 |                    |   | 94,528  |                    |  |   | 27,481       |   |  |             
|Capital expenditures                 |  |                        | 7,632   |                    |   | 2,641   |                    |  |   | 285          |   |  |             
|Depreciation expense                 |  |                        | 9,074   |                    |   | 4,859   |                    |  |   | 189          |   |  |             
|                                     |  |                        |         |                    |  
|2001                                 |  | Packagingandinsulation |         | Specialtychemicals |   |         | Corporateand other |  |   | Eliminations |   |  | Consolidated
|Sales to unaffiliated customers      |  | $                      | 235,634 |                    | $ | 88,013  |                    |  | $ | 2,087        |   |  | $           
|Transfers between operating segments |  |                        | 232     |                    |   | 25,645  |                    |  |   |             |   |  |             
|Income (loss) from operations        |  |                        | 26,193  |                    |   | (3,228  | )                  |  |   | 4,903        |   |  |             
|Identifiable assets                  |  |                        | 167,063 |                    |   | 79,645  |                    |  |   | 27,478       |   |  |             
|Capital expenditures                 |  |                        | 5,851   |                    |   | 6,216   |                    |  |   | 291          |   |  |             
|Depreciation expense                 |  |                        | 9,582   |                    |   | 4,706   |                    |  |   | 302          |   |  |             
|                                     |  |                        |         |                    |  
|2000                                 |  | Packagingandinsulation |         | Specialtychemicals |   |         | Corporateand other |  |   | Eliminations |   |  | Consolidated
|Sales to unaffiliated customers      |  | $                      | 238,774 |                    | $ | 112,007 |                    |  | $ | 2,971        |   |  | $           
|Transfers between operating segments |  |                        | 190     |                    |   | 32,127  |                    |  |   |             |   |  |             
|Income (loss) from operations        |  |                        | 16,621  |                    |   | 2,527   |                    |  |   | (5,781       | ) |  |             
|Identifiable assets                  |  |                        | 188,729 |                    |   | 87,347  |                    |  |   | 29,923       |   |  |             
|Capital expenditures                 |  |                        | 9,684   |                    |   | 5,512   |                    |  |   | 96           |   |  |             
|Depreciation expense                 |  |                        | 8,876   |                    |   | 4,249   |                    |  |   | 148          |   |  |             



F-19



---

##### Table of Contents

Geographic:



|2002                                  |  | UnitedStates |         | Canada |   | Europe |  | Eliminations |         |  | Consolidated
|------------------------------------- |  | ------------ | ------- | ------ | - | ------ |  | ------------ | ------- |  | ------------
|Sales to unaffiliated customers       |  | $            | 226,129 |        | $ | 21,712 |  | $            | 75,341  |  | $           
|Transfers between geographic segments |  |              | 79      |        |   | 9,804  |  |              |        |  |             
|Income from operations                |  |              | 16,487  |        |   | 4,691  |  |              | 2,758   |  |             
|Identifiable assets                   |  |              | 219,679 |        |   | 11,767 |  |              | 52,686  |  |             
|                                      |  |              |         |        |  
|2001                                  |  | UnitedStates |         | Canada |   | Europe |  | Eliminations |         |  | Consolidated
|Sales to unaffiliated customers       |  | $            | 223,559 |        | $ | 16,516 |  | $            | 85,659  |  | $           
|Transfers between geographic segments |  |              | 232     |        |   | 9,845  |  |              |        |  |             
|Income from operations                |  |              | 21,753  |        |   | 3,971  |  |              | 2,144   |  |             
|Identifiable assets                   |  |              | 219,008 |        |   | 11,010 |  |              | 44,168  |  |             
|                                      |  |              |         |        |  
|2000                                  |  | UnitedStates |         | Canada |   | Europe |  | Eliminations |         |  | Consolidated
|Sales to unaffiliated customers       |  | $            | 232,472 |        | $ | 19,744 |  | $            | 101,536 |  | $           
|Transfers between geographic segments |  |              | 954     |        |   | 10,444 |  |              |        |  |             
|Income from operations                |  |              | 1,585   |        |   | 2,089  |  |              | 9,693   |  |             
|Identifiable assets                   |  |              | 227,611 |        |   | 11,488 |  |              | 66,900  |  |             



|12. | SUPPLEMENTAL FINANCIAL INFORMATION
|--- | ----------------------------------



Radnor Holdings Corporation is a holding company that has no operations or assets separate from its investments in subsidiaries. The $100 million Series A
Senior Notes and the $60 million Series B Senior Notes are fully and unconditionally jointly and severally guaranteed by substantially all of the Companys domestic subsidiaries, all of which are 100% owned by the Company.



As a holding company, the Company is dependent upon dividends and other
payments from its subsidiaries to generate the funds necessary to meet its obligations. Subject to certain limitations, the Company is, and will continue to be, able to control its receipt of dividends and other payments from its subsidiaries.



There are no direct prohibitions on the ability of the Company
or any guarantor to obtain funds from its respective subsidiaries by dividend or by loan, but certain of the Companys foreign subsidiaries credit agreements contain covenants, such as minimum debt to equity and current assets to currents
liabilities ratios, that indirectly limit the ability of these subsidiaries to transfer funds to the Company. As of December 27, 2002 and December 28, 2001, the net assets of these foreign subsidiaries totaled $26.8 million and $20.2 million,
respectively.



F-20



---

##### Table of Contents

The following condensed consolidating financial statements of Radnor Holdings Corporation and
subsidiaries have been prepared pursuant to Rule 3-10 Regulation S-X:



RADNOR HOLDINGS CORPORATION AND SUBSIDIARIES

Condensed Consolidating Balance Sheets

December 27, 2002

(In thousands)



|                                                                |  | HoldingCompany |         |   | GuarantorSubsidiaries |   |         | Non-GuarantorSubsidiaries |  |   | Eliminations |   |  | Consolidated |         
|--------------------------------------------------------------- |  | -------------- | ------- | - | --------------------- | - | ------- | ------------------------- |  | - | ------------ | - |  | ------------ | --------
|Assets                                                          |  |                |         |   |                       |   |         |                           |  |   |              |   |  |              |         
|Current assets:                                                 |  |                |         |   |                       |   |         |                           |  |   |              |   |  |              |         
|Cash                                                            |  | $              |        |   |                       | $ | 261     |                           |  | $ | 3,798        |   |  | $            |        
|Accounts receivable, net                                        |  |                |        |   |                       |   | 21,390  |                           |  |   | 20,188       |   |  |              | (5,413  
|Inventories, net                                                |  |                |        |   |                       |   | 29,578  |                           |  |   | 8,137        |   |  |              |        
|Intercompany receivable                                         |  |                |        |   |                       |   | (1,660  | )                         |  |   | 10,791       |   |  |              | (9,131  
|Prepaid expenses and other                                      |  |                | 1,840   |   |                       |   | 6,280   |                           |  |   | 840          |   |  |              | (1,845  
|Deferred tax asset                                              |  |                |        |   |                       |   | 1,838   |                           |  |   |             |   |  |              |        
|                                                                |  |                |         |   |                       |   |         |                           |  |   |              |   |  |              |         
|                                                                |  |                | 1,840   |   |                       |   | 57,687  |                           |  |   | 43,754       |   |  |              | (16,389 
|                                                                |  |                |         |   |                       |   |         |                           |  |   |              |   |  |              |         
|Property, plant, and equipment                                  |  |                |        |   |                       |   | 199,253 |                           |  |   | 50,164       |   |  |              |        
|Less accumulated depreciation                                   |  |                |        |   |                       |   | (59,742 | )                         |  |   | (14,179      | ) |  |              |        
|                                                                |  |                |         |   |                       |   |         |                           |  |   |              |   |  |              |         
|                                                                |  |                |        |   |                       |   | 139,511 |                           |  |   | 35,985       |   |  |              |        
|                                                                |  |                |         |   |                       |   |         |                           |  |   |              |   |  |              |         
|Intercompany receivable                                         |  |                | 32,641  |   |                       |   | 1,990   |                           |  |   | (266         | ) |  |              | (34,365 
|Investments in subsidiaries                                     |  |                | 106,153 |   |                       |   | 24,235  |                           |  |   | 843          |   |  |              | (131,231
|Investments in unconsolidated affiliates                        |  |                |        |   |                       |   |        |                           |  |   | 14,735       |   |  |              |        
|Other assets                                                    |  |                | 1,809   |   |                       |   | 4,408   |                           |  |   | 792          |   |  |              |        
|                                                                |  |                |         |   |                       |   |         |                           |  |   |              |   |  |              |         
|                                                                |  | $              | 142,443 |   |                       | $ | 227,831 |                           |  | $ | 95,843       |   |  | $            | (181,985
|                                                                |  |                |         |   |                       |   |         |                           |  |   |              |   |  |              |         
|Liabilities and Stockholders Equity                            |  |                |         |   |                       |   |         |                           |  |   |              |   |  |              |         
|Current liabilities:                                            |  |                |         |   |                       |   |         |                           |  |   |              |   |  |              |         
|Accounts payable                                                |  | $              |        |   |                       | $ | 23,008  |                           |  | $ | 11,601       |   |  | $            | (468    
|Accrued liabilities                                             |  |                | 1,161   |   |                       |   | 13,725  |                           |  |   | 2,231        |   |  |              | (1,963  
|Intercompany payable                                            |  |                |        |   |                       |   | 8,601   |                           |  |   | (3,171       | ) |  |              | (5,430  
|Current portion of long-term debt and capital lease obligations |  |                |        |   |                       |   | 6,811   |                           |  |   | 878          |   |  |              |        
|                                                                |  |                |         |   |                       |   |         |                           |  |   |              |   |  |              |         
|                                                                |  |                | 1,161   |   |                       |   | 52,145  |                           |  |   | 11,539       |   |  |              | (7,861  
|                                                                |  |                |         |   |                       |   |         |                           |  |   |              |   |  |              |         
|Long-term debt, net of current portion                          |  |                | 159,886 |   |                       |   | 57,824  |                           |  |   | 4,778        |   |  |              | (16,560 
|Capital lease obligations, net of current portion               |  |                |        |   |                       |   | 1,597   |                           |  |   |             |   |  |              |        
|Intercompany payable                                            |  |                | 25,736  |   |                       |   | 5,074   |                           |  |   | 16,553       |   |  |              | (47,363 
|Deferred tax liability                                          |  |                | (3,991  | ) |                       |   | 7,521   |                           |  |   | 4,167        |   |  |              | 119     
|Other non-current liabilities                                   |  |                |        |   |                       |   | 1,745   |                           |  |   | 1            |   |  |              |        
|Commitments and contingencies                                   |  |                |        |   |                       |   |        |                           |  |   |             |   |  |              |        
|Stockholders equity:                                           |  |                |         |   |                       |   |         |                           |  |   |              |   |  |              |         
|Voting and nonvoting common stock                               |  |                | 1       |   |                       |   | 4       |                           |  |   | 22           |   |  |              | (26     
|Additional paid-in capital                                      |  |                | 9,164   |   |                       |   | 96,761  |                           |  |   | 23,463       |   |  |              | (110,001
|Retained earnings (deficit)                                     |  |                | (49,514 | ) |                       |   | 10,928  |                           |  |   | 34,216       |   |  |              | (293    
|Cumulative translation adjustment                               |  |                |        |   |                       |   | (5,768  | )                         |  |   | 1,104        |   |  |              |        
|                                                                |  |                |         |   |                       |   |         |                           |  |   |              |   |  |              |         
|Total stockholders equity                                      |  |                | (40,349 | ) |                       |   | 101,925 |                           |  |   | 58,805       |   |  |              | (110,320
|                                                                |  |                |         |   |                       |   |         |                           |  |   |              |   |  |              |         
|                                                                |  | $              | 142,443 |   |                       | $ | 227,831 |                           |  | $ | 95,843       |   |  | $            | (181,985
|                                                                |  |                |         |   |                       |   |         |                           |  |   |              |   |  |              |         



F-21



---

##### Table of Contents

RADNOR HOLDINGS CORPORATION AND SUBSIDIARIES

Condensed Consolidating Statements of Income

Fiscal year ended December 27, 2002

(In thousands)



|                                                                                                                                                 |  | HoldingCompany |        |   | GuarantorSubsidiaries |   |         | Non-GuarantorSubsidiaries |  |   | Eliminations |   |  | Consolidated |       
|------------------------------------------------------------------------------------------------------------------------------------------------ |  | -------------- | ------ | - | --------------------- | - | ------- | ------------------------- |  | - | ------------ | - |  | ------------ | ------
|Net sales                                                                                                                                        |  | $              |       |   |                       | $ | 226,208 |                           |  | $ | 106,857      |   |  | $            | (9,883
|Cost of goods sold                                                                                                                               |  |                |       |   |                       |   | 167,290 |                           |  |   | 86,094       |   |  |              | (9,883
|                                                                                                                                                 |  |                |        |   |                       |   |         |                           |  |   |              |   |  |              |       
|Gross profit                                                                                                                                     |  |                |       |   |                       |   | 58,918  |                           |  |   | 20,763       |   |  |              |      
|Operating expenses:                                                                                                                              |  |                |        |   |                       |   |         |                           |  |   |              |   |  |              |       
|Distribution                                                                                                                                     |  |                |       |   |                       |   | 17,009  |                           |  |   | 5,612        |   |  |              |      
|Selling, general and administrative                                                                                                              |  |                | 1      |   |                       |   | 26,346  |                           |  |   | 6,777        |   |  |              |      
|                                                                                                                                                 |  |                |        |   |                       |   |         |                           |  |   |              |   |  |              |       
|Income from operations                                                                                                                           |  |                | (1     | ) |                       |   | 15,563  |                           |  |   | 8,374        |   |  |              |      
|Interest, net                                                                                                                                    |  |                | 4,804  |   |                       |   | 13,927  |                           |  |   | 2,651        |   |  |              |      
|Income from unconsolidated affiliates                                                                                                            |  |                |       |   |                       |   |        |                           |  |   | (6,165       | ) |  |              |      
|Other, net                                                                                                                                       |  |                | 6      |   |                       |   | (393    | )                         |  |   | 1,533        |   |  |              |      
|                                                                                                                                                 |  |                |        |   |                       |   |         |                           |  |   |              |   |  |              |       
|Income (loss) before income taxes and discontinued operations                                                                                    |  |                | (4,811 | ) |                       |   | 2,029   |                           |  |   | 10,355       |   |  |              |      
|                                                                                                                                                 |  |                |        |   |                       |   |         |                           |  |   |              |   |  |              |       
|Provision for income taxes:                                                                                                                      |  |                |        |   |                       |   |         |                           |  |   |              |   |  |              |       
|Current                                                                                                                                          |  |                | (1,781 | ) |                       |   | 2,019   |                           |  |   | 407          |   |  |              |      
|Deferred                                                                                                                                         |  |                | 149    |   |                       |   | (310    | )                         |  |   | 2,394        |   |  |              |      
|                                                                                                                                                 |  |                |        |   |                       |   |         |                           |  |   |              |   |  |              |       
|                                                                                                                                                 |  |                | (1,632 | ) |                       |   | 1,709   |                           |  |   | 2,801        |   |  |              |      
|                                                                                                                                                 |  |                |        |   |                       |   |         |                           |  |   |              |   |  |              |       
|Income (loss) before discontinued operations                                                                                                     |  |                | (3,179 | ) |                       |   | 320     |                           |  |   | 7,554        |   |  |              |      
|Loss from discontinued operations, net of tax                                                                                                    |  |                | 48     |   |                       |   |        |                           |  |   |             |   |  |              |      
|                                                                                                                                                 |  |                |        |   |                       |   |         |                           |  |   |              |   |  |              |       
|Net income (loss)                                                                                                                                |  | $              | (3,227 | ) |                       | $ | 320     |                           |  | $ | 7,554        |   |  | $            |      
|                                                                                                                                                 |  |                |        |   |                       |   |         |                           |  |   |              |   |  |              |       
|                                                                                                                                                
|RADNOR HOLDINGS CORPORATION AND SUBSIDIARIES Condensed Consolidating Statements of Cash Flows Fiscal year ended December 27, 2002 (In thousands)
|                                                                                                                                                 |  | HoldingCompany |        |   | GuarantorSubsidiaries |   |         | Non-GuarantorSubsidiaries |  |   | Eliminations |   |  | Consolidated |       
|Net cash provided by (used in) operating activities                                                                                              |  | $              | (5,014 | ) |                       | $ | 11,896  |                           |  | $ | 846          |   |  | $            | 233   
|Cash flows from investing activities:                                                                                                            |  |                |        |   |                       |   |         |                           |  |   |              |   |  |              |       
|Capital expenditures                                                                                                                             |  |                |       |   |                       |   | (10,000 | )                         |  |   | (558         | ) |  |              |      
|Increase in other assets                                                                                                                         |  |                | 977    |   |                       |   | 25      |                           |  |   | (608         | ) |  |              | 70    
|                                                                                                                                                 |  |                |        |   |                       |   |         |                           |  |   |              |   |  |              |       
|Net cash provided by (used in) investing activities                                                                                              |  |                | 977    |   |                       |   | (9,975  | )                         |  |   | (1,166       | ) |  |              | 70    
|                                                                                                                                                 |  |                |        |   |                       |   |         |                           |  |   |              |   |  |              |       
|Cash flows from financing activities:                                                                                                            |  |                |        |   |                       |   |         |                           |  |   |              |   |  |              |       
|Net borrowings on bank financed debt and unsecured notes payable                                                                                 |  |                | (404   | ) |                       |   | 4,283   |                           |  |   | (816         | ) |  |              |      
|Net payments on capital lease obligations                                                                                                        |  |                |       |   |                       |   | (759    | )                         |  |   |             |   |  |              |      
|Change in intercompany, net                                                                                                                      |  |                | 4,472  |   |                       |   | (7,064  | )                         |  |   | 2,895        |   |  |              | (303  
|Change in deferred tax liability                                                                                                                 |  |                | (31    | ) |                       |   | (457    | )                         |  |   | 488          |   |  |              |      
|                                                                                                                                                 |  |                |        |   |                       |   |         |                           |  |   |              |   |  |              |       
|Net cash provided by (used in) financing activities                                                                                              |  |                | 4,037  |   |                       |   | (3,997  | )                         |  |   | 2,567        |   |  |              | (303  
|                                                                                                                                                 |  |                |        |   |                       |   |         |                           |  |   |              |   |  |              |       
|Effect of exchange rate changes on cash                                                                                                          |  |                |       |   |                       |   | (552    | )                         |  |   | 136          |   |  |              |      
|                                                                                                                                                 |  |                |        |   |                       |   |         |                           |  |   |              |   |  |              |       
|Net increase (decrease) in cash                                                                                                                  |  |                |       |   |                       |   | (2,628  | )                         |  |   | 2,383        |   |  |              |      
|Cash, beginning of period                                                                                                                        |  |                |       |   |                       |   | 3,020   |                           |  |   | 1,284        |   |  |              |      
|                                                                                                                                                 |  |                |        |   |                       |   |         |                           |  |   |              |   |  |              |       
|Cash, end of period                                                                                                                              |  | $              |       |   |                       | $ | 392     |                           |  | $ | 3,667        |   |  | $            |      
|                                                                                                                                                 |  |                |        |   |                       |   |         |                           |  |   |              |   |  |              |       



F-22



---

##### Table of Contents

RADNOR HOLDINGS CORPORATION AND SUBSIDIARIES

Condensed Consolidating Balance Sheets

December 28, 2001

(In thousands)



|                                                                |  | HoldingCompany |         |   | GuarantorSubsidiaries |   |         | Non-GuarantorSubsidiaries |  |   | Eliminations |   |  | Consolidated |         
|--------------------------------------------------------------- |  | -------------- | ------- | - | --------------------- | - | ------- | ------------------------- |  | - | ------------ | - |  | ------------ | --------
|Assets                                                          |  |                |         |   |                       |   |         |                           |  |   |              |   |  |              |         
|Current assets:                                                 |  |                |         |   |                       |   |         |                           |  |   |              |   |  |              |         
|Cash                                                            |  | $              |        |   |                       | $ | 3,020   |                           |  | $ | 1,284        |   |  | $            |        
|Accounts receivable, net                                        |  |                |        |   |                       |   | 22,524  |                           |  |   | 10,520       |   |  |              |        
|Inventories, net                                                |  |                |        |   |                       |   | 24,568  |                           |  |   | 6,371        |   |  |              |        
|Intercompany receivable                                         |  |                |        |   |                       |   |        |                           |  |   | 24,906       |   |  |              | (24,906 
|Prepaid expenses and other                                      |  |                | 148     |   |                       |   | 8,520   |                           |  |   | 1,240        |   |  |              |        
|Deferred tax asset                                              |  |                |        |   |                       |   | 1,994   |                           |  |   | 132          |   |  |              | (3      
|                                                                |  |                |         |   |                       |   |         |                           |  |   |              |   |  |              |         
|                                                                |  |                | 148     |   |                       |   | 60,626  |                           |  |   | 44,453       |   |  |              | (24,909 
|                                                                |  |                |         |   |                       |   |         |                           |  |   |              |   |  |              |         
|Property, plant, and equipment                                  |  |                |        |   |                       |   | 190,065 |                           |  |   | 42,521       |   |  |              |        
|Less accumulated depreciation                                   |  |                |        |   |                       |   | (48,914 | )                         |  |   | (9,188       | ) |  |              |        
|                                                                |  |                |         |   |                       |   |         |                           |  |   |              |   |  |              |         
|                                                                |  |                |        |   |                       |   | 141,151 |                           |  |   | 33,333       |   |  |              |        
|                                                                |  |                |         |   |                       |   |         |                           |  |   |              |   |  |              |         
|Intercompany receivable                                         |  |                | 11,481  |   |                       |   | 2,093   |                           |  |   |             |   |  |              | (13,574 
|Investments in subsidiaries                                     |  |                | 106,153 |   |                       |   | 25,078  |                           |  |   | 1            |   |  |              | (131,232
|Investments in unconsolidated affiliates                        |  |                |        |   |                       |   |        |                           |  |   | 6,128        |   |  |              |        
|Deferred tax asset                                              |  |                | 3,985   |   |                       |   |        |                           |  |   |             |   |  |              | (3,985  
|Other assets                                                    |  |                | 3,226   |   |                       |   | 9,756   |                           |  |   | 274          |   |  |              |        
|                                                                |  |                |         |   |                       |   |         |                           |  |   |              |   |  |              |         
|                                                                |  | $              | 124,993 |   |                       | $ | 238,704 |                           |  | $ | 84,189       |   |  | $            | (173,700
|                                                                |  |                |         |   |                       |   |         |                           |  |   |              |   |  |              |         
|Liabilities and Stockholders Equity                            |  |                |         |   |                       |   |         |                           |  |   |              |   |  |              |         
|Current liabilities:                                            |  |                |         |   |                       |   |         |                           |  |   |              |   |  |              |         
|Accounts payable                                                |  | $              |        |   |                       | $ | 25,366  |                           |  | $ | 9,499        |   |  | $            |        
|Accrued liabilities                                             |  |                | 1,310   |   |                       |   | 15,070  |                           |  |   | 1,718        |   |  |              |        
|Intercompany payable                                            |  |                |        |   |                       |   | 24,516  |                           |  |   |             |   |  |              | (24,516 
|Current deferred tax liability                                  |  |                |        |   |                       |   |        |                           |  |   | 3            |   |  |              | (3      
|Current portion of long-term debt and capital lease obligations |  |                |        |   |                       |   | 4,245   |                           |  |   | 792          |   |  |              |        
|                                                                |  |                |         |   |                       |   |         |                           |  |   |              |   |  |              |         
|                                                                |  |                | 1,310   |   |                       |   | 69,197  |                           |  |   | 12,012       |   |  |              | (24,519 
|                                                                |  |                |         |   |                       |   |         |                           |  |   |              |   |  |              |         
|Long-term debt, net of current portion                          |  |                | 160,805 |   |                       |   | 39,456  |                           |  |   | 5,165        |   |  |              |        
|Capital lease obligations, net of current portion               |  |                |        |   |                       |   | 2,447   |                           |  |   |             |   |  |              |        
|Intercompany payable                                            |  |                |        |   |                       |   |        |                           |  |   | 35,155       |   |  |              | (35,155 
|Deferred tax liability                                          |  |                |        |   |                       |   | 10,072  |                           |  |   | (23          | ) |  |              | (3,985  
|Other non-current liabilities                                   |  |                |        |   |                       |   | 2,132   |                           |  |   |             |   |  |              |        
|Commitments and contingencies                                   |  |                |        |   |                       |   |        |                           |  |   |             |   |  |              |        
|Stockholders equity:                                           |  |                |         |   |                       |   |         |                           |  |   |              |   |  |              |         
|Voting and nonvoting common stock                               |  |                | 1       |   |                       |   | 4       |                           |  |   | 23           |   |  |              | (27     
|Additional paid-in capital                                      |  |                | 9,164   |   |                       |   | 97,634  |                           |  |   | 22,590       |   |  |              | (110,001
|Retained earnings (deficit)                                     |  |                | (46,287 | ) |                       |   | 25,745  |                           |  |   | 11,225       |   |  |              | 7       
|Cumulative translation adjustment                               |  |                |        |   |                       |   | (7,983  | )                         |  |   | (1,958       | ) |  |              | (20     
|                                                                |  |                |         |   |                       |   |         |                           |  |   |              |   |  |              |         
|Total stockholders equity                                      |  |                | (37,122 | ) |                       |   | 115,400 |                           |  |   | 31,880       |   |  |              | (110,041
|                                                                |  |                |         |   |                       |   |         |                           |  |   |              |   |  |              |         
|                                                                |  | $              | 124,993 |   |                       | $ | 238,704 |                           |  | $ | 84,189       |   |  | $            | (173,700
|                                                                |  |                |         |   |                       |   |         |                           |  |   |              |   |  |              |         



F-23



---

##### Table of Contents

RADNOR HOLDINGS CORPORATION AND SUBSIDIARIES

Condensed Consolidating Statements of Income

Fiscal year ended December 28, 2001

(In thousands)



|                                                                                                                                                 |  | HoldingCompany |        |   | GuarantorSubsidiaries |   |         | Non-GuarantorSubsidiaries |  |   | Eliminations |   |  | Consolidated |        
|------------------------------------------------------------------------------------------------------------------------------------------------ |  | -------------- | ------ | - | --------------------- | - | ------- | ------------------------- |  | - | ------------ | - |  | ------------ | -------
|Net sales                                                                                                                                        |  | $              |       |   |                       | $ | 226,817 |                           |  | $ | 110,565      |   |  | $            | (11,648
|Cost of goods sold                                                                                                                               |  |                |       |   |                       |   | 177,835 |                           |  |   | 84,532       |   |  |              | (11,648
|                                                                                                                                                 |  |                |        |   |                       |   |         |                           |  |   |              |   |  |              |        
|Gross profit                                                                                                                                     |  |                |       |   |                       |   | 48,982  |                           |  |   | 26,033       |   |  |              |       
|Operating expenses:                                                                                                                              |  |                |        |   |                       |   |         |                           |  |   |              |   |  |              |        
|Distribution                                                                                                                                     |  |                |       |   |                       |   | 17,542  |                           |  |   | 7,634        |   |  |              |       
|Selling, general, and administrative                                                                                                             |  |                |       |   |                       |   | 21,069  |                           |  |   | 11,395       |   |  |              |       
|Gain on sale of business                                                                                                                         |  |                |       |   |                       |   | (10,493 | )                         |  |   |             |   |  |              |       
|                                                                                                                                                 |  |                |        |   |                       |   |         |                           |  |   |              |   |  |              |        
|Income from operations                                                                                                                           |  |                |       |   |                       |   | 20,864  |                           |  |   | 7,004        |   |  |              |       
|Interest, net                                                                                                                                    |  |                |       |   |                       |   | 18,376  |                           |  |   | 3,955        |   |  |              |       
|Income from unconsolidated affiliates                                                                                                            |  |                |       |   |                       |   |        |                           |  |   | (1,160       | ) |  |              |       
|Other, net                                                                                                                                       |  |                |       |   |                       |   | 670     |                           |  |   | 1,987        |   |  |              |       
|                                                                                                                                                 |  |                |        |   |                       |   |         |                           |  |   |              |   |  |              |        
|Income before income taxes and discontinued operations                                                                                           |  |                |       |   |                       |   | 1,818   |                           |  |   | 2,222        |   |  |              |       
|                                                                                                                                                 |  |                |        |   |                       |   |         |                           |  |   |              |   |  |              |        
|Provision (benefit) for income taxes:                                                                                                            |  |                |        |   |                       |   |         |                           |  |   |              |   |  |              |        
|Current                                                                                                                                          |  |                |       |   |                       |   | 329     |                           |  |   | 118          |   |  |              |       
|Deferred                                                                                                                                         |  |                |       |   |                       |   | 1,993   |                           |  |   | (290         | ) |  |              |       
|                                                                                                                                                 |  |                |        |   |                       |   |         |                           |  |   |              |   |  |              |        
|                                                                                                                                                 |  |                |       |   |                       |   | 2,322   |                           |  |   | (172         | ) |  |              |       
|                                                                                                                                                 |  |                |        |   |                       |   |         |                           |  |   |              |   |  |              |        
|Income (loss) before discontinued operations                                                                                                     |  |                |       |   |                       |   | (504    | )                         |  |   | 2,394        |   |  |              |       
|Loss from discontinued operations, net of tax                                                                                                    |  |                | 247    |   |                       |   |        |                           |  |   |             |   |  |              |       
|                                                                                                                                                 |  |                |        |   |                       |   |         |                           |  |   |              |   |  |              |        
|Net income (loss)                                                                                                                                |  | $              | (247   | ) |                       | $ | (504    | )                         |  | $ | 2,394        |   |  | $            |       
|                                                                                                                                                 |  |                |        |   |                       |   |         |                           |  |   |              |   |  |              |        
|                                                                                                                                                
|RADNOR HOLDINGS CORPORATION AND SUBSIDIARIES Condensed Consolidating Statements of Cash Flows Fiscal year ended December 28, 2001 (In thousands)
|                                                                                                                                                 |  | HoldingCompany |        |   | GuarantorSubsidiaries |   |         | Non-GuarantorSubsidiaries |  |   | Eliminations |   |  | Consolidated |        
|Net cash provided by (used in) operating activities                                                                                              |  | $              | (5,161 | ) |                       | $ | 610     |                           |  | $ | 2,654        |   |  | $            |       
|Cash flows from investing activities:                                                                                                            |  |                |        |   |                       |   |         |                           |  |   |              |   |  |              |        
|Capital expenditures                                                                                                                             |  |                |       |   |                       |   | (7,197  | )                         |  |   | (5,161       | ) |  |              |       
|Investment in subsidiary                                                                                                                         |  |                |       |   |                       |   | (18,073 | )                         |  |   |             |   |  |              | 18,073 
|Net cash proceeds from sale of business                                                                                                          |  |                |       |   |                       |   | 30,935  |                           |  |   |             |   |  |              |       
|Increase in other assets                                                                                                                         |  |                | 949    |   |                       |   | (2,290  | )                         |  |   | (504         | ) |  |              |       
|                                                                                                                                                 |  |                |        |   |                       |   |         |                           |  |   |              |   |  |              |        
|Net cash provided by (used in) investing activities                                                                                              |  |                | 949    |   |                       |   | 3,375   |                           |  |   | (5,665       | ) |  |              | 18,073 
|                                                                                                                                                 |  |                |        |   |                       |   |         |                           |  |   |              |   |  |              |        
|Cash flows from financing activities:                                                                                                            |  |                |        |   |                       |   |         |                           |  |   |              |   |  |              |        
|Net borrowings on bank financed debt and unsecured notes payable                                                                                 |  |                |       |   |                       |   | (9,933  | )                         |  |   | (2,972       | ) |  |              |       
|Net payments on capital lease obligations                                                                                                        |  |                |       |   |                       |   | (928    | )                         |  |   | (219         | ) |  |              |       
|Change in paid-in-capital                                                                                                                        |  |                |       |   |                       |   |        |                           |  |   | 18,073       |   |  |              | (18,073
|Change in intercompany, net                                                                                                                      |  |                | 4,212  |   |                       |   | 8,574   |                           |  |   | (12,786      | ) |  |              |       
|                                                                                                                                                 |  |                |        |   |                       |   |         |                           |  |   |              |   |  |              |        
|Net cash provided by (used in) financing activities                                                                                              |  |                | 4,212  |   |                       |   | (2,287  | )                         |  |   | 2,096        |   |  |              | (18,073
|                                                                                                                                                 |  |                |        |   |                       |   |         |                           |  |   |              |   |  |              |        
|Effect of exchange rate changes on cash                                                                                                          |  |                |       |   |                       |   | 428     |                           |  |   | (633         | ) |  |              |       
|                                                                                                                                                 |  |                |        |   |                       |   |         |                           |  |   |              |   |  |              |        
|Net increase (decrease) in cash                                                                                                                  |  |                |       |   |                       |   | 2,126   |                           |  |   | (1,548       | ) |  |              |       
|Cash, beginning of period                                                                                                                        |  |                |       |   |                       |   | 894     |                           |  |   | 2,832        |   |  |              |       
|                                                                                                                                                 |  |                |        |   |                       |   |         |                           |  |   |              |   |  |              |        
|Cash, end of period                                                                                                                              |  | $              |       |   |                       | $ | 3,020   |                           |  | $ | 1,284        |   |  | $            |       
|                                                                                                                                                 |  |                |        |   |                       |   |         |                           |  |   |              |   |  |              |        



F-24



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##### Table of Contents

RADNOR HOLDINGS CORPORATION AND SUBSIDIARIES

Condensed Consolidating Statements of Income

Fiscal year ended December 29, 2000

(In thousands)



|                                                                                                                                                 |  | Holding Company |        |   | Guarantor Subsidiaries |   |         | Non-Guarantor Subsidiaries |  |   | Eliminations |   |  | Consolidated |        
|------------------------------------------------------------------------------------------------------------------------------------------------ |  | --------------- | ------ | - | ---------------------- | - | ------- | -------------------------- |  | - | ------------ | - |  | ------------ | -------
|Net sales                                                                                                                                        |  | $               |       |   |                        | $ | 234,085 |                            |  | $ | 131,065      |   |  | $            | (11,398
|Cost of goods sold                                                                                                                               |  |                 |       |   |                        |   | 189,723 |                            |  |   | 98,929       |   |  |              | (11,398
|                                                                                                                                                 |  |                 |        |   |                        |   |         |                            |  |   |              |   |  |              |        
|Gross profit                                                                                                                                     |  |                 |       |   |                        |   | 44,362  |                            |  |   | 32,136       |   |  |              |       
|Operating expenses:                                                                                                                              |  |                 |        |   |                        |   |         |                            |  |   |              |   |  |              |        
|Distribution                                                                                                                                     |  |                 |       |   |                        |   | 18,392  |                            |  |   | 7,611        |   |  |              |       
|Selling, general, and administrative                                                                                                             |  |                 |       |   |                        |   | 25,469  |                            |  |   | 11,659       |   |  |              |       
|                                                                                                                                                 |  |                 |        |   |                        |   |         |                            |  |   |              |   |  |              |        
|Income from operations                                                                                                                           |  |                 |       |   |                        |   | 501     |                            |  |   | 12,866       |   |  |              |       
|Interest, net                                                                                                                                    |  |                 |       |   |                        |   | 16,910  |                            |  |   | 4,815        |   |  |              |       
|Income from unconsolidated affiliates                                                                                                            |  |                 |       |   |                        |   |        |                            |  |   | (876         | ) |  |              |       
|Other, net                                                                                                                                       |  |                 |       |   |                        |   | (5,354  | )                          |  |   | 6,458        |   |  |              |       
|                                                                                                                                                 |  |                 |        |   |                        |   |         |                            |  |   |              |   |  |              |        
|Income (loss) before income taxes and discontinued operations                                                                                    |  |                 |       |   |                        |   | (11,055 | )                          |  |   | 2,469        |   |  |              |       
|                                                                                                                                                 |  |                 |        |   |                        |   |         |                            |  |   |              |   |  |              |        
|Provision (benefit) for income taxes:                                                                                                            |  |                 |        |   |                        |   |         |                            |  |   |              |   |  |              |        
|Current                                                                                                                                          |  |                 |       |   |                        |   | 15      |                            |  |   | 24           |   |  |              |       
|Deferred                                                                                                                                         |  |                 |       |   |                        |   | (3,112  | )                          |  |   | (1           | ) |  |              |       
|                                                                                                                                                 |  |                 |        |   |                        |   |         |                            |  |   |              |   |  |              |        
|                                                                                                                                                 |  |                 |       |   |                        |   | (3,097  | )                          |  |   | 23           |   |  |              |       
|                                                                                                                                                 |  |                 |        |   |                        |   |         |                            |  |   |              |   |  |              |        
|Income (loss) before discontinued operations                                                                                                     |  |                 |       |   |                        |   | (7,958  | )                          |  |   | 2,446        |   |  |              |       
|Loss from discontinued operations, net of tax                                                                                                    |  |                 | 144    |   |                        |   |        |                            |  |   |             |   |  |              |       
|                                                                                                                                                 |  |                 |        |   |                        |   |         |                            |  |   |              |   |  |              |        
|Net income (loss)                                                                                                                                |  | $               | (144   | ) |                        | $ | (7,958  | )                          |  | $ | 2,446        |   |  | $            |       
|                                                                                                                                                 |  |                 |        |   |                        |   |         |                            |  |   |              |   |  |              |        
|                                                                                                                                                
|RADNOR HOLDINGS CORPORATION AND SUBSIDIARIES Condensed Consolidating Statements of Cash Flows Fiscal year ended December 29, 2000 (In thousands)
|                                                                                                                                                 |  | Holding Company |        |   | Guarantor Subsidiaries |   |         | Non-Guarantor Subsidiaries |  |   | Eliminations |   |  | Consolidated |        
|Net cash provided by (used in) operating activities                                                                                              |  | $               | (7,242 | ) |                        | $ | 6,572   |                            |  | $ | (1,643       | ) |  | $            |       
|Cash flows from investing activities:                                                                                                            |  |                 |        |   |                        |   |         |                            |  |   |              |   |  |              |        
|Capital expenditures                                                                                                                             |  |                 |       |   |                        |   | (11,920 | )                          |  |   | (3,372       | ) |  |              |       
|Increase in other assets                                                                                                                         |  |                 | 1,018  |   |                        |   | (2,645  | )                          |  |   | (929         | ) |  |              |       
|                                                                                                                                                 |  |                 |        |   |                        |   |         |                            |  |   |              |   |  |              |        
|Net cash provided by (used in) investing activities                                                                                              |  |                 | 1,018  |   |                        |   | (14,565 | )                          |  |   | (4,301       | ) |  |              |       
|                                                                                                                                                 |  |                 |        |   |                        |   |         |                            |  |   |              |   |  |              |        
|Cash flows from financing activities:                                                                                                            |  |                 |        |   |                        |   |         |                            |  |   |              |   |  |              |        
|Net borrowings on bank financed debt and unsecured notes payable                                                                                 |  |                 |       |   |                        |   | 9,420   |                            |  |   | 8,108        |   |  |              |       
|Net payments on capital lease obligations                                                                                                        |  |                 |       |   |                        |   | (855    | )                          |  |   | (234         | ) |  |              |       
|Change in intercompany, net                                                                                                                      |  |                 | 6,224  |   |                        |   | (2,783  | )                          |  |   | (3,441       | ) |  |              |       
|                                                                                                                                                 |  |                 |        |   |                        |   |         |                            |  |   |              |   |  |              |        
|Net cash provided by financing activities                                                                                                        |  |                 | 6,224  |   |                        |   | 5,782   |                            |  |   | 4,433        |   |  |              |       
|                                                                                                                                                 |  |                 |        |   |                        |   |         |                            |  |   |              |   |  |              |        
|Effect of exchange rate changes on cash                                                                                                          |  |                 |       |   |                        |   | 191     |                            |  |   | (322         | ) |  |              |       
|                                                                                                                                                 |  |                 |        |   |                        |   |         |                            |  |   |              |   |  |              |        
|Net decrease in cash                                                                                                                             |  |                 |       |   |                        |   | (2,020  | )                          |  |   | (1,833       | ) |  |              |       
|Cash, beginning of period                                                                                                                        |  |                 |       |   |                        |   | 2,914   |                            |  |   | 4,665        |   |  |              |       
|                                                                                                                                                 |  |                 |        |   |                        |   |         |                            |  |   |              |   |  |              |        
|Cash, end of period                                                                                                                              |  | $               |       |   |                        | $ | 894     |                            |  | $ | 2,832        |   |  | $            |       
|                                                                                                                                                 |  |                 |        |   |                        |   |         |                            |  |   |              |   |  |              |        





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##### Table of Contents

INDEPENDENT AUDITORS REPORT



The Partners

Radnor Investments, L.P.:



We have audited the accompanying statement of assets, liabilities and partners capital of Radnor Investments, L.P. (the Partnership), including the
statement of investments, as of December 31, 2002, and the related statements of operations, changes in partners capital and cash flows for the year then ended. These financial statements are the responsibility of the management of the
Partnership. Our responsibility is to express an opinion on these financial statements based on our audit.



We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.



In our opinion, the financial statements referred to above
present fairly, in all material respects, the assets, liabilities and partners capital of Radnor Investments, L.P. as of December 31, 2002, and the results of its operations and its cash flows for the year then ended in conformity with
accounting principles generally accepted in the United States of America.



/s/ KPMG LLP



Philadelphia, Pennsylvania

August 26, 2003





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##### Table of Contents

RADNOR INVESTMENTS, L.P.

Statements of Assets, Liabilities and Partners Capital

December 31, 2002 and 2001



|                                  |  | 2002 |            | 2001       
|--------------------------------- |  | ---- | ---------- | -----------
|                                  |  |      |            | (Unaudited)
|Assets                            |  |      |            |            
|Cash                              |  | $    | 3,232      |            
|Interest receivable               |  |      | 60,248     |            
|Other receivables                 |  |      | 9,632      |            
|Investments, at fair value        |  |      | 47,786,512 |            
|                                  |  |      |            |            
|                                  |  | $    | 47,859,624 |            
|                                  |  |      |            |            
|Liabilities and Partners Capital |  |      |            |            
|Partners capital:                |  |      |            |            
|General partner                   |  | $    | 34,551,134 |            
|Limited partner                   |  |      | 13,308,490 |            
|                                  |  |      |            |            
|Total partners capital           |  |      | 47,859,624 |            
|                                  |  |      |            |            
|                                  |  | $    | 47,859,624 |            
|                                  |  |      |            |            



See accompanying notes
to financial statements.



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RADNOR INVESTMENTS, L.P.

Statements of Operations

Years ended December 31, 2002, 2001 and 2000



|                                                                |  | 2002 |            |   | 2001        |   | 2000        | 
|--------------------------------------------------------------- |  | ---- | ---------- | - | ----------- | - | ----------- | 
|                                                                |  |      |            |   | (Unaudited) |   | (Unaudited) | 
|Revenue:                                                        |  |      |            |   |             |   |             | 
|Interest income                                                 |  | $    | 65,121     |   |             | $ | 21,326      | 
|Operating expenses:                                             |  |      |            |   |             |   |             | 
|Selling, general and administrative                             |  |      | 626,503    |   |             |   | 6,438       | 
|                                                                |  |      |            |   |             |   |             | 
|Total operating expenses                                        |  | $    | 626,503    |   |             |   | 6,438       | 
|                                                                |  |      |            |   |             |   |             | 
|Net income (loss) before unrealized appreciation of investments |  |      | (561,382   | ) |             |   | 14,888      | 
|Net unrealized appreciation of investments                      |  |      | 38,518,467 |   |             |   | 826,638     | 
|                                                                |  |      |            |   |             |   |             | 
|Net increase in partners capital from operations               |  | $    | 37,957,085 |   |             | $ | 841,526     | 
|                                                                |  |      |            |   |             |   |             | 



See accompanying notes
to financial statements.



F-28



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RADNOR INVESTMENTS, L.P.

Statements of Changes in Partners Capital

Years ended December 31, 2002, 2001 and 2000



|                                                  |  | Generalpartner |            | Limitedpartner |   |            | Total | 
|------------------------------------------------- |  | -------------- | ---------- | -------------- | - | ---------- | ----- | 
|Balance, December 31, 1999 (Unaudited)            |  | $              | 578,474    |                | $ | 1,544,058  |       | 
|Contributions                                     |  |                |           |                |   | 1,205,405  |       | 
|Distributions                                     |  |                |           |                |   |           |       | 
|Net increase in partners capital from operations |  |                | 1,941,032  |                |   | 425,628    |       | 
|                                                  |  |                |            |                |   |            |       | 
|Balance, December 31, 2000 (Unaudited)            |  | $              | 2,519,506  |                | $ | 3,175,091  |       | 
|Contributions                                     |  |                |           |                |   | 746,631    |       | 
|Distributions                                     |  |                |           |                |   |           |       | 
|Net increase in partners capital from operations |  |                | 61,394     |                |   | 780,132    |       | 
|                                                  |  |                |            |                |   |            |       | 
|Balance, December 31, 2001                        |  | $              | 2,580,900  |                | $ | 4,701,854  |       | 
|Contributions                                     |  |                |           |                |   | 7,591,725  |       | 
|Distributions                                     |  |                |           |                |   | (4,971,940 | )     | 
|Net increase in partners capital from operations |  |                | 31,970,234 |                |   | 5,986,851  |       | 
|                                                  |  |                |            |                |   |            |       | 
|Balance, December 31, 2002                        |  | $              | 34,551,134 |                | $ | 13,308,490 |       | 
|                                                  |  |                |            |                |   |            |       | 



See accompanying notes
to financial statements.



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##### Table of Contents

RADNOR INVESTMENTS, L.P.

Statements of Cash Flows

Years ended December 31, 2002, 2001 and 2000



|                                                                              |  | 2002 |             |   | 2001        |   |          | 2000        | 
|----------------------------------------------------------------------------- |  | ---- | ----------- | - | ----------- | - | -------- | ----------- | 
|                                                                              |  |      |             |   | (Unaudited) |   |          | (Unaudited) | 
|Cash flows from operating activities:                                         |  |      |             |   |             |   |          |             | 
|Net increase in partners capital from operations                             |  | $    | 37,957,085  |   |             | $ | 841,526  |             | 
|Adjustments to reconcile net income to net cash used in operating activities: |  |      |             |   |             |   |          |             | 
|Unrealized appreciation of investments                                        |  |      | (38,518,467 | ) |             |   | (826,638 | )           | 
|Increase in other receivables                                                 |  |      | (3,205      | ) |             |   | (6,427   | )           | 
|Increase in interest receivable                                               |  |      | (25,661     | ) |             |   | (21,326  | )           | 
|                                                                              |  |      |             |   |             |   |          |             | 
|Net cash used in operating activities                                         |  |      | (590,248    | ) |             |   | (12,865  | )           | 
|                                                                              |  |      |             |   |             |   |          |             | 
|Cash flows from investing activities:                                         |  |      |             |   |             |   |          |             | 
|Purchase of investments                                                       |  |      | (1,998,001  | ) |             |   | (734,008 | )           | 
|Repayment of investment principal                                             |  |      | 5,010,598   |   |             |   |         |             | 
|                                                                              |  |      |             |   |             |   |          |             | 
|Net cash provided by (used in) investing activities                           |  |      | 3,012,597   |   |             |   | (734,008 | )           | 
|                                                                              |  |      |             |   |             |   |          |             | 
|Cash flows from financing activities:                                         |  |      |             |   |             |   |          |             | 
|Cash contributions                                                            |  |      | 2,549,345   |   |             |   | 746,631  |             | 
|Cash distributions                                                            |  |      | (4,971,940  | ) |             |   |         |             | 
|                                                                              |  |      |             |   |             |   |          |             | 
|Net cash provided by (used in) financing activities                           |  |      | (2,422,595  | ) |             |   | 746,631  |             | 
|                                                                              |  |      |             |   |             |   |          |             | 
|Net decrease in cash                                                          |  |      | (246        | ) |             |   | (242     | )           | 
|Cash, beginning of period                                                     |  |      | 3,478       |   |             |   | 3,720    |             | 
|                                                                              |  |      |             |   |             |   |          |             | 
|Cash, end of period                                                           |  | $    | 3,232       |   |             | $ | 3,478    |             | 
|                                                                              |  |      |             |   |             |   |          |             | 



See accompanying notes
to financial statements.



F-30



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##### Table of Contents

RADNOR INVESTMENTS, L.P.

Statements of Investments

December 31, 2002 and 2001



|                                                       |  |                                         |  | 2002       
|------------------------------------------------------ |  | --------------------------------------- |  | -----------
|                                                       |  |                                         |  | Cost       
|Creative Networks International (the Netherlands) B.V. |  | Debt Securities                         |  | $          
|                                                       |  | Common Stock(30 shares)                 |  |            
|SkinHealth, Inc.                                       |  | Debt Securities                         |  |            
|                                                       |  | Series A Preferredstock (33,334 shares) |  |            
|                                                       |  | Common Stock(79,711 shares)             |  |            
|Radnor Ventures, LLC                                   |  | 1.5 member units                        |  |            
|Prism e-Solutions, LLC                                 |  | 140 member units                        |  |            
|                                                       |  |                                         |  |            
|                                                       |  |                                         |  | $          
|                                                       |  |                                         |  |            
|                                                       |  |                                        
|                                                       |  |                                         |  | 2001       
|                                                       |  |                                         |  | (Unaudited)
|                                                       |  |                                         |  | Cost       
|Creative Networks International (the Netherlands) B.V. |  | Common Stock(30 shares)                 |  | $          
|SkinHealth, Inc.                                       |  | Debt Securities                         |  |            
|                                                       |  | Series A Preferred stock(33,334 shares) |  |            
|                                                       |  | Common Stock(50,000 shares)             |  |            
|Radnor Ventures, LLC                                   |  | 1.5 member units                        |  |            
|Prism e-Solutions, LLC                                 |  | 115 member units                        |  |            
|                                                       |  |                                         |  |            
|                                                       |  |                                         |  | $          
|                                                       |  |                                         |  |            



See accompanying notes
to financial statements.





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##### Table of Contents

RADNOR INVESTMENTS, L.P.

NOTES TO FINANCIAL STATEMENTS



|1. | ORGANIZATION AND BUSINESS
|-- | -------------------------



Radnor Investments, L.P. (the Partnership), a Delaware limited partnership, was formed pursuant to an Agreement of Limited Partnership (the Partnership
Agreement) for the purpose of making investments generally in privately-held companies in a variety of industries.



|2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|-- | ------------------------------------------



The financial statements have been prepared on the value method of accounting in accordance with accounting principles generally accepted in the United
States of America for investment companies.



Valuation of
Investments



The Partnerships investments are
generally subject to restrictions on resale and generally have no established market. The Partnership values substantially all of its investments at fair value as determined in good faith by Radnor Investment Advisors, L.P. (the General Partner) in
accordance with the Partnerships valuation policy. The Partnership determines fair value to be the amount for which an investment could be exchanged in an orderly disposition over a reasonable period of time between willing parties other than
in a forced or liquidation sale. The Partnerships valuation policy considers the fact that no ready market exists for substantially all of the entities in which it invests. The Partnerships valuation policy is intended to provide a
consistent basis for determining the fair value of the portfolio. The Partnership will record unrealized depreciation on investments when it believes that an investment has become impaired, including where collection of a loan or when the enterprise
value of the company does not currently support the cost of the Partnerships investments. Conversely, the Partnership will record unrealized appreciation if it believes that the underlying portfolio company has appreciated in value and,
therefore, the Partnerships investment has also appreciated in value. Because of the inherent uncertainty of such valuation, estimated values may differ significantly from the values that would have been used had a ready market for these
investments existed and/or the Partnership liquidated its position and the differences could be material.



Use of Estimates



The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to
make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the
reporting period. Actual results could differ from those estimates.



Income Taxes



The Partnership itself is not
subject to income taxes; each partner is severally liable for income taxes, if any, on his, her or its proportionate share of the Partnerships net taxable income.



Capital Calls



The Partnership calls capital from certain of its partners in connection with proposed portfolio investments and to provide for partnership and
organizational expenses specified by the Partnership Agreement. At the time the capital is called it is recorded as a capital contribution.



Recently Issued Accounting Standards



In January 2003, the Financial Accounting Standards Board (FASB) issued Interpretation No. 46, Consolidation of Variable Interest
Entities an interpretation of ARB No. 51. This Interpretation clarifies the application of Accounting Research Bulletin No. 51, Consolidated Financial Statements, to certain entities in which equity investors do not have the
characteristics of a controlling financial interest or do not have



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sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. The Interpretation
applies immediately to variable interest entities created after January 31, 2003, and to variable interest entities in which an enterprise obtains an interest after that date. It applies in the first fiscal year or interim period beginning after
June 15, 2003, to variable interest entities in which an entity holds a variable interest that it acquired prior to February 1, 2003. The Partnership continues to evaluate the impact, if any, that adopting FASB Interpretation No. 46 may have on its
financial statements.



|3. | PARTNERSHIP AGREEMENT
|-- | ---------------------



The following summarizes certain matters related to the organization of the Partnership. Partners should refer to the Partnership Agreement for a more
complete description of the Partnership terms.



The Partnership
ceases to exist on December 31, 2047, unless earlier terminated in accordance with the Partnership Agreement.



The General Partner is not required to contribute capital to the Partnership. The General Partner must notify the limited partner when additional capital
contributions to the Partnership are required. Within ten days thereafter, the limited partner shall notify the General Partner as to whether it agrees to make such additional capital contributions.



A Capital Account, as defined in the Partnership Agreement, is maintained on
the books of the Partnership for each partner. The balance in each partners Capital Account is adjusted by the partners allocable share of net profit or loss, capital contributions and the amount of cash distributed to such partner, as
set forth in the Partnership Agreement. Allocations of income, gains, losses and deductions of the Partnership are allocated among the capital accounts of the Partners, as set forth in the Partnership Agreement.



|4. | RELATED-PARTY TRANSACTIONS
|-- | --------------------------



The Partnership has paid certain administrative expenses on behalf of SkinHealth, Inc. and is entitled to reimbursement of these amounts. At December 31,
2002, $9,632 in advances was included in other receivables in the accompanying balance sheet.



|5. | COMMITMENTS AND CONTINGENCIES
|-- | -----------------------------



During fiscal 2002, the Partnership committed to fund an additional $1,500,000 to Creative Networks International (the Netherlands) B.V. At December 31,
2002, $535,297 had been advanced to the company and was included in investments in the accompanying balance sheet.



|6. | INVESTMENTS
|-- | -----------



Creative Networks International (the Netherlands) B.V.



Creative Networks International (the Netherlands) B.V. and subsidiaries is a pay-television programming company whose major operation is a basic tier arts
and entertainment channel on the Sky satellite platform in Italy. Sky, which is owned by Rupert Murdochs The News Corporation Limited and is akin to BSkyB in the United Kingdom, is currently one of two pay-television platforms in Italy and
merged with its only competitor, Vivendi Universals Telepiu, on July 15, 2003.



In September 1997, the Partnership invested approximately $55,000 to acquire 16 Class A Shares and 14 Class B Shares, representing 55.6% of the total outstanding shares and approximately 40.0% of the voting interest
of Creative Networks International (the Netherlands) B.V. In July 2002, the Partnership converted its Class B shares into an equal number of Class A Shares, thereby increasing its total voting interest in Creative Networks International (the
Netherlands) B.V. to approximately 55.6%. The total cost of the conversion, including the capital contribution and legal and accounting fees, totaled $941,811.



The Partnerships investment at cost in Creative Networks International (the Netherlands) B.V. and its subsidiaries as of December 31, 2001 was
$55,000. The Partnerships investment was valued at $5,613,000 in the accompanying balance sheet, which approximated fair market value as of December 31, 2001.



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The Partnerships investment at cost in Creative Networks International (the Netherlands) B.V. and
its subsidiaries as of December 31, 2002 was $996,811. The Partnerships investment was valued at $45,639,000 in the accompanying balance sheet, which approximated fair market value as of December 31, 2002.



During fiscal 2002, the limited partner contributed a $5,042,380 debt
security due from Creative Networks International (the Netherlands) B.V. to the Partnership. The Partnership subsequently established a revolving line of credit with Creative Networks International (the Netherlands) B.V., which enables Creative
Networks International (the Netherlands) B.V. to borrow up to a maximum of $1,500,000. Interest accrues on the outstanding principle amount at an annual rate equal to the prime rate plus 2.50% and compounds monthly. As of December 31, 2002, the
outstanding principal balance under both the debt security and the line of credit was $1,071,084 and was included in investments in the accompanying balance sheet.



SkinHealth, Inc.



SkinHealth, Inc. is an operator of retail, self-pay cosmetic dermatology and skin rejuvenation centers based inside dermatology practices. The company
partners with respected dermatologists and offers its clients cosmetic and aesthetic services as well as a full line of skin care products. The company has targeted the Boston, Massachusetts region for its first market.



Since July 1999, the Partnership invested $2,092,388 to acquire approximately
31.1% of the issued and outstanding shares of common and preferred stock of SkinHealth, Inc.



The Partnerships investment at cost in SkinHealth, Inc. as of December 31, 2001 was $2,080,500. The Partnerships investment was valued at $1,230,409 in the accompanying balance sheet, which approximated
fair market value as of December 31, 2001.



The
Partnerships investment at cost in SkinHealth, Inc. as of December 31, 2002 was $2,092,388. The Partnerships investment was valued at $717,741 in the accompanying balance sheet, which approximated fair market value as of
December 31, 2002.



On May 4, 2000, the Partnership
advanced SkinHealth, Inc. $200,000 under a promissory note. Interest accrues on the outstanding principle at a rate of 10.0% and compounds annually. All interest accrued from inception through the third anniversary date shall be added to the
principal and repaid in 16 equal principal installments on the first day of each calendar quarter commencing on April 1, 2003. As of December 31, 2002, the original $200,000 was included in investments while the $58,198 of accrued interest was
included in interest receivable in the accompanying balance sheet.



On August 20, 2002, the Partnership established a grid note with SkinHealth, Inc., which enables SkinHealth, Inc. to borrow up to a maximum of $25,000. Interest accrues on the outstanding principal amount at an annual rate equal to the
prime rate as published from time to time by Bank of America plus 1.0%. As of December 31, 2002, the outstanding principal balance under the grid note was $10,000 and was included in investments in the accompanying balance sheet.



Radnor Ventures, LLC



Radnor Ventures, LLC was formed for the sole purpose of investing, through
e-Healthcare Partners, LLC, in healthcare-related companies  Internet Healthcare Group (IHCG) and Lumenos, Inc. (Lumenos), respectively.



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IHCG is a holding company partnered with Internet Capital Group of Wayne, Pennsylvania and is focused
exclusively on healthcare and insurance. By acquiring stakes in partner companies and integrating them into a collaborative network, IHCG seeks to exploit technology enhanced opportunities within the healthcare segment of the U.S. economy.



In April 2000, the Partnership invested $150,000 to acquire
approximately 11.3% of the member units of Radnor Ventures, LLC.



The Partnerships investment at cost in Radnor Ventures, LLC as of December 31, 2001 was $150,000. The Partnerships investment was valued at $94,853 in the accompanying balance sheet, which approximated fair market value as of
December 31, 2001.



The Partnerships investment
at cost in Radnor Ventures, LLC as of December 31, 2002 was $150,000. The Partnerships investment was valued at $23,687 in the accompanying balance sheet, which approximated fair market value as of December 31, 2002.



Prism e-Solutions, LLC



Prism e-Solutions, LLC is a start-up software company that plans to deliver
a variety of software products to end users via the internet.



Since inception, the Partnership invested $125,000 to acquire 140 member units of Prism e-Solutions, LLC.



The Partnerships investment in Prism e-Solutions, LLC as of December 31, 2001 was $100,000. The Partnerships investment was valued at cost as
of December 31, 2001.



The Partnerships investment in
Prism e-Solutions, LLC as of December 31, 2002 was $125,000. The Partnerships investment was valued at cost as of December 31, 2002.



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